By Philip Nussel, Automotive News
Detroit, Michigan-Automotive seating and electronics supplier Lear Corp. posted a net loss of $645.0 million during the final quarter of 2006 after taking a $607.3 million loss on the pending sale of its troubled interiors unit.
Those losses compared with a loss of $602.6 million during the same quarter in 2005. During that quarter, Lear wrote down the value of that same interiors unit by $342.8 million.
Lear has since agreed to transfer the interiors business to a company controlled by New York billionaire Wilbur Ross. Lear will retain a 25 percent stake in that venture. The transaction is expected to be completed in March.
Lear said it posted fourth-quarter 2006 revenue of $4280 million, compared with $4400 million in revenue during the same quarter of 2005.
For all of 2006, Lear said it posted a loss of $707.5 million on revenue of $17.84 billion, compared with a loss of $1380 million on revenue of $17090 million during 2005. The 2006 figures included $636 million in losses from the sale of the interiors business and a $1010 million reduction in the value of that business.
Despite the red ink from interiors, Lear said its operational performance improved.
Operating earnings before taxes and one-time charges came to $114.7 million for 2006, compared with $96.6 million in 2005.
Like most other North American suppliers, Lear grappled with production cuts by the Detroit 3 during the latter part of 2006.
"In a challenging environment last year, we improved our financial results for the full year, improved our liquidity position and took a number of important steps to reposition Lear for future success," Lear ceo Bob Rossiter said in a statement.
"We refocused our strategy to manage our business on a product-line basis. We increased our emphasis on new technology and innovation," he said. "We also continued to make steady progress in diversifying our sales on a customer, regional and vehicle segment basis."
During 2005, Lear said General Motors was its largest customer, accounting for 28 percent of its sales. Ford Motor Co. was next, accounting for 25 percent of its sales. Comparable information for 2006 is not available.
Lear stock traded higher on the fourth quarter news today despite a down day on Wall Street. Lear stock closed at $33.92 a share, up 74 cents or 2.2 percent. The shares earlier in the day traded just short of their 52-week high of $34.45. Some 3.43 million shares traded hands today-more than double the daily average of 1.54 million shares.
Lear, of Southfield, Michigan, ranks No. 7 on the Automotive News list of the top 100 global suppliers with worldwide original-equipment automotive parts sales of $17090 million in 2005.You may e-mail Philip Nussel at [email protected]"