SOUTHFIELD, Michigan – October 30, 2026 -- Lear Corporation (NYSE: LEA) lifted third-quarter 2026 net income 26% to $137 million on revenue of $5.8 billion, up 2% year over year, and expanded its share repurchase authorization to $1.5 billion through December 31, 2029.
Adjusted earnings per share rise 33% despite weaker industry output
Adjusted net income climbed 23% to $185 million, while adjusted earnings per share reached $3.71 against $2.79 a year earlier. Reported earnings per share rose 36% to $2.74. Lear credited higher earnings and its buyback program for the gains.
Core operating earnings increased 6% to $256 million, or 4.4% of sales, compared with $241 million, or 4.2%, in the third quarter of 2025. Commercial recoveries, restructuring and IDEA by Lear savings supported earnings. Lower production on key Lear platforms and higher engineering and launch costs partly offset them.
Global vehicle production fell 2% in the quarter, with North America down 5%, Europe up 1% and China down 7%. Lear's growth over market was 4 percentage points company-wide, including 4 points in Seating and 2 points in E-Systems.
E-Systems margin expands 60 basis points while Seating adjusted margin gains 20
E-Systems posted a margin of 3.5% and an adjusted margin of 4.8%, against 2.9% and 4.2% in 2025. Seating's margin slipped to 5.5% from 5.6%, while its adjusted margin improved to 6.3% from 6.1%.
Sales excluding commodities, foreign exchange and tariff recoveries also rose 2%. New business and commercial recoveries drove the increase, partly offset by lower production on key platforms and the wind-down of non-core electronics programs.
Free cash flow falls to $158 million from $307 million
Net cash from operating activities was $329 million, down from $444 million. Quarter-end cash stood at $889 million, with total liquidity of $2.9 billion.
Lear repurchased 1,375,917 shares for $175 million in the quarter, reaching its full-year target of $350 million, and paid $38 million in dividends. The remaining authorization of about $1.5 billion equals roughly 26% of its market capitalization at current prices. Since 2011, Lear has bought back 64.9 million shares for $6.3 billion at an average of $96.38, cutting shares outstanding by about 62%.
Seating wins span India, China, Indonesia and Thailand
Seating awards include Lear's largest complete seat award in India, from Mahindra & Mahindra. The company also won awards with BYD in Indonesia and Thailand and with a Chinese luxury EV automaker in China. A North American automaker awarded Lear a key replacement program and a future program in North America. Mercedes awarded a ComfortFlex program, and JLR awarded ComfortMax Seat and FlexAir programs.
In E-Systems, Lear secured a conquest award on a commercial and passenger van with a North American automaker in Europe. It also won multiple conquest and new wire awards with customers in China.
CEO Ray Scott said the Orion, Michigan, complete seat facility, on track to launch early next year, is Lear's "most sophisticated plant."
Lear holds core earnings guidance while adjusting for production schedules
Lear adjusted its 2026 outlook for changing production schedules on key platforms but maintained its full-year core operating earnings outlook. It expects operational execution and additional restructuring savings to offset lower revenue and higher commodity and other input costs.
The midpoint of guidance assumes full-year global industry production about 1% lower than in 2025 on a Lear sales-weighted basis. The outlook uses average exchange rates of $1.15 per euro and 6.80 RMB per dollar. It excludes any future impact of tariff changes or company- or industry-wide production disruptions.