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Lear Corp.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 31 July 2026: press release. Guidance figures: 5 raised, 3 kept. The quarter’s numbers.

Key takeaways

  • Revenue rose 3% to $6.2 billion: Net sales were $6,209.4 million against $6,030.4 million in the second quarter of 2025, an increase of 3%. Source
  • Earnings per share up 24%: Diluted net income per share was $3.79 against $3.06, and adjusted EPS was $4.28 against $3.47; management attributed the gains to higher earnings and the share repurchase program. Source
  • Core operating earnings rose 7%: Core operating earnings were $313.2 million, or 5.0% of sales, against $291.8 million, or 4.8%, a year earlier. Management cited new business and currency changes as contributors. Source
  • E-Systems margin improved to 5.4%: E-Systems sales were $1,585.3 million against $1,556.5 million; segment margin was 5.4% against 3.5%, and adjusted margin was 5.8% against 4.9%. Source
  • Quarterly production flat year over year: Management described global vehicle production as flat, with Europe down 2% and China down 4%; on a Lear sales-weighted basis the decline was about 1%. Source
  • Share repurchases of $100 million: Lear bought back 735,873 shares in the quarter and had about $600 million of authorization left, about 8% of total market capitalization at current prices. Source
  • Cash and liquidity at quarter end: Cash and cash equivalents were $1,000.6 million against $1,033.0 million at December 31, 2025; total liquidity was $3.0 billion. Source

“Lear continued its strong start to 2026 despite a dynamic operating environment, delivering improved year-over-year revenue and operating income in both segments”

Ray Scott, Lear's President and Chief Executive Officer

Guidance

AreaPeriodFigureAgainst last quarter
Net sales Sourcefull year 2026$23,540 million - $24,010 millionRaised from $23,210 million - $24,010 million
Core operating earnings Sourcefull year 2026$1,080 million - $1,200 millionRaised from $1,030 million - $1,200 million
Adjusted EBITDA Sourcefull year 2026$1,700 million - $1,820 millionRaised from $1,650 million - $1,820 million
Restructuring costs Sourcefull year 2026≈$175 millionKept
Operating cash flow Sourcefull year 2026$1,250 million - $1,350 millionRaised from $1,210 million - $1,310 million
Capital spending Sourcefull year 2026≈$660 millionKept
Free cash flow Sourcefull year 2026$590 million - $690 millionRaised from $550 million - $650 million
Industry production assumption Sourcefull year 2026decrease of approximately 2% from 2025, Lear sales-weighted basisKept
Exchange rate assumption Sourcefull year 2026$1.16/Euro and 6.82 RMB/$

What changed from last quarter

  • Guidance raised: Midpoints of net sales, core operating earnings, adjusted EBITDA, operating cash flow and free cash flow raised, and ranges narrowed across most metrics. Source
  • Guidance kept: Restructuring costs of about $175 million and capital spending of about $660 million are unchanged from the first-quarter figures. Source

Results and growth drivers

  • Revenue rose 3% to $6.2 billion: Net sales were $6,209.4 million against $6,030.4 million in the second quarter of 2025, an increase of 3%. Source
  • Earnings per share up 24%: Diluted net income per share was $3.79 against $3.06, and adjusted EPS was $4.28 against $3.47; management attributed the gains to higher earnings and the share repurchase program. Source
  • Core operating earnings rose 7%: Core operating earnings were $313.2 million, or 5.0% of sales, against $291.8 million, or 4.8%, a year earlier. Management cited new business and currency changes as contributors. Source
  • Operating and free cash flow both rose: Operating cash flow was $461 million against $296 million a year earlier, and free cash flow was $288 million against $171 million. Source

Segments and regions

  • E-Systems margin improved to 5.4%: E-Systems sales were $1,585.3 million against $1,556.5 million; segment margin was 5.4% against 3.5%, and adjusted margin was 5.8% against 4.9%. Source
  • Seating margin slightly lower: Seating sales were $4,624.1 million against $4,473.9 million; segment margin was 6.2% against 6.4%, and adjusted margin was flat at 6.7%. Source
  • Europe and South America sales grew: Europe and Africa sales rose to $2,326.4 million from $2,163.2 million, and South America to $259.2 million from $203.3 million; North America and Asia were lower. Source

“We continue to win significant new business awards, including key new and conquest program awards with Audi”

Ray Scott, Lear's President and Chief Executive Officer

Products, customers and investment

  • Audi new and conquest awards: Management said the company continues to win significant new business awards, including new and conquest program awards with Audi. Source
  • Wire awards in China, Europe and North America: Wire awards came from a luxury Chinese automaker and BAIC in China, a replacement and partial conquest award with Renault in Europe, and new awards with Stellantis in North America. Source
  • Supplier awards and PACE finalist: Lear was named 2025 General Motors Supplier of the Year and Supplier of the Year for Wire for the first time, and its modular thermal comfort systems were a 2026 PACE Awards finalist. Source
  • Rochester Hills integration center opened: The company opened its Advanced Manufacturing Integration Center in Rochester Hills, Michigan, showing automation and digital tools under the IDEA by Lear name. Source
  • Growth with Chinese automakers: Management said it is accelerating growth with Chinese automakers, citing a complete seat award with Leapmotor in South America. Source

Costs and margins

  • Cost of sales and SG&A increased: Cost of sales was $5,739.1 million against $5,591.3 million, and selling, general and administrative expenses were $197.5 million against $186.3 million. Source
  • Restructuring costs slightly lower: Costs related to restructuring actions were $32.0 million against $33.9 million; other special items were $13.1 million against $10.4 million. Source
  • Income taxes and affiliate income higher: Income taxes were $48.5 million against $41.6 million, and equity in net income of affiliates was $19.3 million against $16.0 million. Source

“Our strong cash generation enabled us to further increase the pace of share repurchases, driving strong earnings per share growth while sustaining our dividend.”

Ray Scott, Lear's President and Chief Executive Officer

Demand and production

  • Quarterly production flat year over year: Management described global vehicle production as flat, with Europe down 2% and China down 4%; on a Lear sales-weighted basis the decline was about 1%. Source
  • Sales excluding items rose 1%: Sales excluding commodities, foreign exchange and tariff recoveries rose 1%, reflecting commercial recoveries and new business, partly offset by lower production on key platforms. Source
  • Production source changed to Mobility Global: Production figures are now based on Mobility Global estimates; the first-quarter release was based on S&P Global estimates. Source

Capital, cash and returns

  • Share repurchases of $100 million: Lear bought back 735,873 shares in the quarter and had about $600 million of authorization left, about 8% of total market capitalization at current prices. Source
  • Cash and liquidity at quarter end: Cash and cash equivalents were $1,000.6 million against $1,033.0 million at December 31, 2025; total liquidity was $3.0 billion. Source
  • Dividends paid in quarter: The company paid $39 million in dividends in the quarter, alongside the repurchases. Source
  • Capital expenditures increased: Capital expenditures were $172.7 million against $125.4 million a year earlier. Source
  • Diluted share count reduced: Weighted average diluted shares were 50.8 million against 54.1 million, and diluted shares at quarter end were 50,399,429. Source

Figures management reported

FigureReported
Content per vehicle, North America Source$633 (prior year $637)
Content per vehicle, Europe and Africa Source$517 (prior year $474)

Risks management discussed

  • External: Management said changes in foreign exchange rates affected quarterly earnings, alongside the addition of new business. Source

Earlier plans management reported on

  • Not stated: Management said the company is sustaining its dividend while increasing the pace of share repurchases. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.