Lear Corp. (LEA) To Report Q2 Earnings: What's In The Cards?

Lear Corp. (NYSE:LEA) is set to release its second-quarter 2017 results before the market opens on Jul 26.

Last quarter, the company delivered a positive earnings surprise of 8.10%. The same was registered in each of the trailing four quarters, with an average beat of 8.69%.

Let’s see how things have shaped up for the forthcoming announcement.

Lear Corporation Price and EPS Surprise

Factors to Consider

Lear Corp. expects 2017 sales to be better than 2016. The company has projected sales of $19.5 billion and core operating earnings of about $1.6 billion, compared with $18.6 billion and $1.5 billion in 2016, respectively.

The company expects vehicle production in both Europe and Africa, besides China to improve 2%, respectively, year over year in 2017. An adjusted net income is also expected to be $1.1 billion in 2017, up from the $1 billion, recorded in 2016.

At the end of first-quarter 2017, Lear Corp. had a share repurchase authorization of $873 million till Dec 31, 2019. The recent acquisition of Grupo Antolin’s automotive seating business will help the company grow further with its experienced management and good-quality facilities that include high-utility and light weight seat designs.

Earnings Whispers

Our proven model does not conclusively show whether Lear Corp. is likely to beat or miss estimates this quarter because it does not have the right combination of two key ingredients.

Zacks ESP: The Earnings ESP for Lear Corp. is -0.24% because the Most Accurate estimate of $4.14 is pegged below the Zacks Consensus Estimate of $4.15.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Lear Corp. currently carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of an earnings beat. Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Price Performance

Lear Corp. stock has gained 2.5% in the last three months, underperforming the 8.1% increase of the industry it belongs to.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to come up with an earnings beat this quarter:

Cummins Inc. (NYSE:CMI) has an Earnings ESP of +3.1% and carries a Zacks Rank #2. The company is expected to report its second-quarter 2017 results on Aug 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tenneco Inc. (NYSE:TEN) has an Earnings ESP of +1.67% and carries a Zacks Rank #3. The company’s second-quarter 2017 financial results are expected to release on Jul 28.

Horizon Global Corporation (NYSE:HZN) has an Earnings ESP of +2.99% and carries a Zacks Rank #3. The company’s second-quarter 2017 financial results are expected to release on Aug 1.

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