DETROIT -- Automotive electronics and seating supplier Lear Corp. reported a stronger financial performance in the fourth quarter of 2020 than a year prior, despite the ongoing COVID-19 pandemic.
Net income surged 60 percent in the quarter to $202 million while revenue improved 8.7 percent to $5.2 billion, Lear said in a statement on Thursday.
The increase is the result of an uptick in automotive production as the industry increased output to make up for lost production during shutdowns in the spring during the initial spike of COVID-19 across Europe and North America. During the quarter, global auto production increased 2 percent — led by an increase in production of 5 percent in China. Lear's production increased with the global output at 2 percent. Lear said its revenue increase was driven by new, more lucrative business.
"The team achieved these strong results and continued to execute Lear's key strategic growth initiatives while navigating the unique challenges presented by the COVID-19 pandemic," CEO Ray Scott said in the statement. "It is an exciting time in the automotive industry, as the transition to electric vehicles is accelerating and global vehicle production volumes are growing."
Lear's core seating business reported adjusted earnings of $295 million, up 38 percent, while its sales grew 7 percent to $3.6 billion.
Lear's E-Systems business posted adjusted earnings of $103 million, up 12 percent, whiles sales in unit grew 13 percent to $1.3 billion.
Full-year woes
But even with a strong fourth quarter, Lear could not outrun the full-year impact of COVID-19 in 2020.
Lear said net income for the year still plunged 78 percent to $158.5 million while revenue fell 14 percent to $17 billion.
The supplier said vehicle production in 2020 fell 20 percent in North America, 22 percent in Europe and down 5 percent in China.
Meanwhile, Lear said it secured $2.8 billion in new backlog business for 2021 through 2023, which has the company projecting a strong 2021. Lear forecasts sales will reach $19.8 billion to $20.8 billion in 2021, a strong performance than prior to the pandemic.
The forecast didn't impress Wall Street. Lear shares fell 4.8 percent to $152.50 in midday trading.
The company, based in suburban Detroit, ranks No. 9 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $19.8 billion in 2019.
