10-Q · May 1, 2026
Lear Corporation's Q1 2026 earnings report shows a robust revenue increase of 5% year-over-year, attributed mostly to higher production volumes and favorable FX rates. Diluted EPS saw significant growth, rising to $3.34…
Earnings analysis · 10-Q
LEA earnings analysis
Filed October 30, 2026 · Our reading of the company's report
The latest report
Lear’s third quarter showed modest year-over-year improvement, with revenue up 1.6%, gross margin up 20 basis points to 6.6%, and diluted EPS up 36% to $2.74. E-Systems delivered meaningful earnings and margin…
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Lear’s third quarter showed modest year-over-year improvement, with revenue up 1.6%, gross margin up 20 basis points to 6.6%, and diluted EPS up 36% to $2.74. E-Systems delivered meaningful earnings and margin expansion, while Seating margin slipped and results declined sequentially from the second quarter. Nine-month operating cash flow improved substantially, but lower expected vehicle production, evolving tariff exposure, additional restructuring costs, and $641.3 million of current debt maturities temper the outlook.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $2.74
What stood out
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Revenue grew modestly; sequential trends softened
Third-quarter revenue was $5,773.0 million, up 1.6% from $5,679.8 million year over year but down 7.0% from $6,210 million in the prior quarter. Gross margin improved to 6.6% from 6.4% year over year, while derived operating margin was approximately 3.4% versus 3.4% based on segment earnings of $197.0 million and $192.5 million, respectively.
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EPS improved year over year
Diluted GAAP EPS was $2.74 versus $2.02 year over year, an increase of $0.72 or 36%. EPS declined from $3.79 in the prior quarter, reflecting the lower sequential revenue and operating performance.
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E-Systems drove margin expansion
E-Systems was the key operating bright spot: revenue increased 1% to $1,446.9 million and segment earnings rose 22% to $50.0 million, lifting margin to 3.5% from 2.9%. Seating revenue increased 2% to $4,326.1 million, but margin declined to 5.5% from 5.6%.
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Operating cash flow strengthened
Nine-month operating cash flow increased to $887.9 million from $612.9 million year over year, helped by a $30.3 million working-capital cash use versus $355.3 million in the prior-year period. Nine-month capital expenditures were $468.2 million versus $366.8 million, implying cash flow after capex of approximately $419.7 million.
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Liquidity supports near-term obligations
Liquidity remained substantial, with $889.4 million of cash and cash equivalents and $2.0 billion of available revolver capacity at October 3, 2026. Accounts receivable increased to $4,076.0 million from $3,902.8 million at year-end, while inventories rose to $1,759.8 million from $1,693.2 million.
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Restructuring burden eased, buybacks accelerated
Restructuring costs declined to $114.4 million in the first nine months from $156.0 million year over year, while management expects approximately $33 million of additional costs related to actions initiated by October 3, 2026. The company also repurchased $350.0 million of stock during the first nine months and increased remaining authorization to $1,498.2 million.
What to watch
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Lower vehicle production pressures demand
Management expects global automotive production to decline approximately 2% in 2026 versus 2025, with Lear sales-weighted production down approximately 1%. In the first nine months, production declined 2% in North America and 1% in Asia, exposing revenue and margins to further schedule reductions.
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Tariff and trade-policy uncertainty
Trade and tariff exposure remains material despite no material gross-profit impact in the first nine months of 2026: Lear paid approximately $110 million of 2025 auto-parts tariffs and $85 million of 2025 IEEPA tariffs. Future recovery depends on customers and government actions, while USMCA renewal remains uncertain.
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Near-term restructuring and debt maturities
Approximately $33 million of additional restructuring costs are expected over the next twelve months, following $114.4 million incurred in the first nine months of 2026. In addition, $641.3 million of long-term debt was classified as current, compared with $3.7 million at December 31, 2025, due primarily to the maturity of the $550.0 million 2027 Notes and the $50.0 million term loan within twelve months.
Management's outlook
The 10-Q does not provide explicit numeric EPS or revenue guidance. MD&A states that 2026 global automotive production is expected to decrease approximately 2% versus 2025, or approximately 1% on a Lear sales-weighted basis; 2026 capital spending is estimated at $660 million; and approximately $33 million of additional restructuring costs are expected over the next twelve months.
Earlier filings 4
10-K · February 13, 2026
Lear reported essentially flat full-year sales of $23,259.1 million in 2025 versus $23,306.0 million in 2024 while investing in automation and targeted acquisitions to support Seating and E-Systems growth. The company…
10-Q · May 6, 2025
Lear reported net sales of $5,560.3 million and diluted EPS of $1.49 for the quarter ended March 29, 2025. Revenue and GAAP EPS declined year-over-year, working capital absorption drove operating cash used of $127.7…
10-K · February 14, 2025
Lear positions itself as a global leader in Seating and E-Systems, pursuing growth via modular/thermal seating features and electrification-driven E-Systems, while investing in automation and targeted acquisitions.…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.