Lear Corporation (NYSE: LEA) has just lowered its guidance this morning based upon announced revisions of industry forecasting services and others which have announced downward revisions in their estimates for 2008 North American vehicle production based on lower sales rates for full-size pickup trucks and large sport utility vehicles. In addition to lower unit sales, raw material costs, particularly costs related to steel, have continued to increase.
Lear cut its 2008 forecast for North American industry production from 14.1 million vehicles to approximately 13.8 million vehicles. Its sales outlook for 2008 is being adjusted downward to approximately $15.3 billion, from the previous outlook of $15.5 billion. It also sees lower income before interest, other expense, income taxes, restructuring costs and other special items to a lower range of $600 to $640 million from the previously offered range of $660 to $700 million. The company is also increasing its estimated restructuring investment for 2008 to about $125 million. The revised outlook for full-year 2008 free cash flow is now approximately $200 million.
Lear shares are actually still up about 2.5% at $25.38 today, and its 52-week trading range $20.00 to $41.33.
Jon C. Ogg
June 4, 2008
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