Lear Corporation Reports Decline in Revenue and Profitability in Q1 2025

Lear Corporation reported its financial results for the first quarter of 2025, revealing a decline in both revenue and profitability compared to the same period in 2024. The company generated net sales of $5.56 billion, a decrease of 7% from $5.99 billion in the prior year. This decline was attributed to lower production volumes across its platforms in North America, Europe, and Asia, which negatively impacted sales by approximately $372 million. Additionally, the winddown of certain business operations and unfavorable foreign exchange fluctuations contributed to a further reduction of $123 million and $116 million, respectively. Despite these challenges, new business acquisitions in Asia and North America provided a $106 million boost to sales.

In terms of profitability, Lear's consolidated net income fell to $80.7 million, or $1.49 per diluted share, down from $109.6 million, or $1.90 per diluted share, in the first quarter of 2024. The decrease in net income was influenced by a combination of factors, including increased restructuring costs, which totaled $84 million in the first quarter of 2025 compared to $54 million in the same period last year. The company's gross profit also declined to $359 million, representing a gross margin of 6.5%, slightly lower than the 6.6% margin reported in the previous year.

Operationally, Lear's Seating segment reported net sales of $4.15 billion, down from $4.48 billion, while the E-Systems segment saw sales decrease to $1.41 billion from $1.52 billion. The Seating segment's earnings were impacted by lower production volumes and foreign exchange losses, while the E-Systems segment faced challenges from the divestiture of certain businesses. The company also recognized a loss of $3 million related to the disposal of a non-core business during the quarter.

Looking ahead, Lear Corporation is focused on strategic initiatives to enhance operational efficiency and profitability. The company completed the acquisition of StoneShield Engineering in February 2025, which is expected to accelerate automation in its E-Systems business. Additionally, Lear anticipates incurring approximately $42 million in further restructuring costs related to ongoing initiatives aimed at aligning its manufacturing capacity with market demands. The company remains committed to returning capital to shareholders, having declared a quarterly cash dividend of $0.77 per share and repurchased $25 million of its common stock in the first quarter.