Lear Corporation Declared a Dividend of $0.30 per Share

Lear Corporation (LEA) has a market cap of $8.3 billion. It fell by 1.8% and closed at $111.80 per share on May 19, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were -2.4%, -1.1%, and -8.7%, respectively. This means that Lear is trading 2.7% below its 20-day moving average, 0.36% above its 50-day moving average, and 0.46% above its 200-day moving average.

The Schwab US Mid-Cap ETF (SCHM) invests 0.34% of its holdings in Lear. SCHM tracks a market-cap-weighted index of mid-cap stocks in the D0w Jones US Total Stock Market Index. SCHM’s YTD price movement was 1.6% as of May 19, 2016.

The market caps of Lear’s competitors are as follows:

• Johnson Controls (JCI) – $27.8 billion
• Delphi Automotive (DLPH) – $18.3 billion
• Magna International (MGA) – $15.7 billion

Lear Corporation declared a quarterly cash dividend of $0.30 per share on its common stock. The dividend will be paid on June 30, 2016, to shareholders of record at the close of business on June 10, 2016.

Lear Corporation reported fiscal 1Q16 net sales of $4.7 billion—a rise of 3.1% compared to net sales of $4.5 billion in fiscal 1Q15. The company’s cost of sales as a percentage of net sales fell by 2.2% in fiscal 1Q16.

Its net income and EPS (earnings per share) rose to $248.4 million and $3.29, respectively, in fiscal 1Q16—compared to $147.3 million and $1.86, respectively, in fiscal 1Q15. It reported adjusted EPS of $3.40 in fiscal 1Q16—a rise of 49.1% compared to fiscal 1Q15.

Lear’s cash and cash equivalents fell by 1.9% and its inventories rose by 6.6% in fiscal 1Q16—compared to fiscal 4Q15. Its current ratio fell to 1.35x, and its DE (debt-to-equity) ratio rose to 2.2x in fiscal 1Q16—compared to a current ratio and a DE ratio of 1.38x and 2.1x, respectively, in fiscal 4Q15.

During fiscal 1Q16, it repurchased ~1.4 million shares of its common stock worth $155 million.

The company made the following projections for fiscal 2016:

• sales of $18.5 billion–$19.0 billion
• core operating earnings of $1.40 billion–$1.45 billion
• free cash flow of ~$850 million
• effective tax rate of ~28%
• adjusted net income of $900 million–$940 million
• pretax operational restructuring costs of ~$70 million
• capital spending of ~$525 million

In the next part, we’ll look at Church & Dwight.