Shares of Lear Corp. (LEA) hit 52-week high of $56.70 on Mar 15. Shares of the company started escalating, buoyed up by its impressive fourth quarter results, aggressive share repurchase strategy, optimistic guidance and promises of boosting shareholder value in the future. Their previous 52-week high was $56.08.
Lear Corporation designs, manufactures, assembles and supplies automotive seat systems, electrical distribution systems and related components primarily to automotive original equipment manufacturers. The company sells its products mainly in North America, South America, Europe and Asia. It has a market cap of $5.3 billion.
Lear posted a 17.5% rise in adjusted earnings per share to $1.48 in the fourth quarter of 2012 from $1.26 in the corresponding quarter last year. Profits in the quarter beat the Zacks Consensus Estimate by a dime.
Revenues increased 6% to $3.7 million in the reported quarter, surpassing the Zacks Consensus Estimate of $3.5 million. Global industry production increased 2% year over year, with a 10% hike in North America and 4% rise in China.
During 2012, Lear repurchased 5.4 million shares for $223 million. Since the inception of the share repurchase program, the company has repurchased 11.5 million shares for $502 million.
In Jan 2013, the board of directors of Lear has authorized an additional $800 million for repurchase under the existing share repurchase program and extended the authorization till Jan 10, 2016. With this, the company had approximately $1.0 billion worth of shares remaining under its share repurchase program at the end of the quarter. In 2013, Lear anticipates higher revenues between $15.0 and $15.5 billion compared with $14.6 billion in 2012.
Currently, Lear retains a Zacks Rank #3 (Hold). While we remain on the sidelines about the company, stocks from the same industry that warrant a look include Denso Corp. (DNZOY), Visteon Corp. (VC) and STRATTEC Security Corporation (STRT).. All of them carry a Zacks Rank #1 (Strong Buy).
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