Executive Summary

Q4 2024 revenue was $5.71B (−2% YoY, +2% QoQ) and adjusted EPS was $2.94 (−3% YoY, +2% QoQ); core operating margin was 4.5% as lower production on key Lear platforms offset margin-accretive backlog and positive net performance .
Seating margins were pressured (adj. 6.1% vs 6.8% YoY), while E-Systems adj. margins held 5.0% (flat YoY), with E-Systems facing negative net performance from inventory reductions; CFO guided Q1’25 as trough margins with underlying run-rate improving through 2025 on automation and restructuring .
2025 guidance: Net sales $21.875–$22.875B, core op earnings $915–$1,175M, adj. EBITDA $1.535–$1.795B, FCF $430–$630M, capex ≈$625M; assumptions include industry production −2% (sales-weighted) and no tariff effects; targeting ≥80% FCF conversion and ≥$250M buybacks in 2025 .
Strategic catalysts: ComfortMax Seat integration with GM (launch 2Q25) and first INTU health/wellness software award with Bentley; acquisition of StoneShield to accelerate wire-harness automation under IDEA by Lear .
Backlog recalibration amid EV pushouts/cuts: two-year 2025–2026 core backlog $1.3B; 2025 net new business trimmed (~~$230M vs $800M prior) offset by 2026 increase (~~$1.1B), with JV backlog up to $750M; management expects stronger growth in 2026 and a ~5% total company core margin run-rate exiting 2025 .

What Went Well and What Went Wrong

What Went Well
- Strong cash generation in Q4 (CFO $681M; FCF $489M) supported $101M in repurchases and $42M in dividends; 2024 FCF conversion met 80% target .
- E-Systems margin improved for second straight year (adj. 5.1% FY24) and held adj. 5.0% in Q4; management reaffirmed long-term 8% target for E-Systems .
- Product/innovation momentum: ComfortMax Seat with GM (2Q25 launch), first INTU award with Bentley; IDEA-led automation savings expected ~$75M in 2025, annualizing to ~$150M .
What Went Wrong
- Volume headwinds on key platforms drove YoY declines in revenue and core earnings in Q4; Seating adj. margins fell to 6.1% from 6.8% YoY .
- Backlog/award timing impacted by EV program cuts, delays (e.g., Ram REV/Charger, Volvo EX90, Polestar 3, several GM EVs), reducing 2025 net new business to ~$230M (vs $800M prior) .
- Near-term outlook tempered: 2025 sales guided down ~4% at midpoint with lower industry volumes (North America/Europe) and Q1 expected to be the trough margin quarter .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Billions)	$5.84	$5.58	$5.71
Diluted EPS ($)	$2.18	$2.41	$1.61
Adjusted EPS ($)	$3.03	$2.89	$2.94
Core Operating Earnings ($USD Millions)	$287.7	$256.6	$257.7
Core Op Margin (%)	4.9%	4.6%	4.5%
Cash from Operations ($USD Millions)	$569.7	$182.7	$680.8
Free Cash Flow ($USD Millions)	$376.5	$50.5	$488.7
Weighted Avg Diluted Shares (M)	58.5	56.4	54.8

Segment performance

Segment	Q4 2023	Q3 2024	Q4 2024
Seating Net Sales ($USD Billions)	$4.34	$4.11	$4.19
Seating Segment Margin (%)	5.6%	5.9%	5.5%
Seating Adjusted Segment Margin (%)	6.8%	6.4%	6.1%
E-Systems Net Sales ($USD Billions)	$1.50	$1.47	$1.53
E-Systems Segment Margin (%)	4.9%	4.4%	3.8%
E-Systems Adjusted Segment Margin (%)	5.6%	5.0%	5.0%

KPIs and regional mix

KPI	Q4 2023	Q3 2024	Q4 2024
Content per Vehicle – North America ($)	604	651	626
Content per Vehicle – Europe & Africa ($)	458	508	447
Regional Sales – North America ($USD Billions)	$2.27	$2.40	$2.32
Regional Sales – Europe & Africa ($USD Billions)	$2.17	$1.89	$1.98
Regional Sales – Asia ($USD Billions)	$1.17	$1.06	$1.20
Regional Sales – South America ($USD Billions)	$0.22	$0.23	$0.21

Notes: Management cited lower production on key platforms as the primary driver of YoY declines with offsets from margin-accretive backlog and positive net performance; E-Systems faced negative net performance in Q4 due to inventory reductions .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales	FY2025	n/a	$21.875B – $22.875B	New
Core Operating Earnings	FY2025	n/a	$915M – $1,175M	New
Adjusted EBITDA	FY2025	n/a	$1,535M – $1,795M	New
Restructuring Costs	FY2025	n/a	≈$175M	New
Operating Cash Flow	FY2025	n/a	$1,055M – $1,255M	New
Capital Spending	FY2025	n/a	≈$625M	New
Free Cash Flow	FY2025	n/a	$430M – $630M	New
Share Repurchases	FY2025	n/a	≥$250M plan contingent on FCF/allocation	New
Macro Assumptions	FY2025	n/a	Industry production −2% (sales-weighted); no tariffs assumed	New
Dividend	Next Payable	n/a	$0.77/sh payable Mar 26, 2025 (record Mar 6)	Declared

Context: Management expects overall adjusted margin ~4.7% in 2025 with positive net performance offsetting lower volumes; exit 2025 run-rate ~5% total company core op margin .

Earnings Call Themes & Trends

Topic	Q2 2024 (Prev-2)	Q3 2024 (Prev-1)	Q4 2024 (Current)	Trend
Automation/IDEA & AI	Introduced ComfortFlex and ComfortMax; acquired WIP to enhance automation; E-Systems margin improving .	Continued automation focus; adj. EPS growth with accelerated buybacks; ComfortFlex launch with Volvo .	~$75M savings in 2025 (to $150M annualized); acquired StoneShield to accelerate wire harness automation .	Strengthening execution and savings ramp.
Product innovation (Seating)	ComfortFlex/ComfortMax roadmap announced .	ComfortFlex launched with Volvo; additional module awards .	ComfortMax integration with GM mid-2025; first INTU award with Bentley .	Commercialization momentum.
Supply chain/macro	Global prod −1% YoY; sales-weighted −1% .	Global prod −5%; sales-weighted −6% .	Global prod +1% but sales-weighted −1%; Q1’25 expected trough margins .	Stabilizing volumes; cautious near term.
Tariffs/Policy	n/a	n/a	No tariffs assumed in guide; mgmt sees industry-wide solution; import exposures: $2.9B Mexico→US (Seating $2.2B, E-Systems $0.7B) .	Risk acknowledged; mitigations ongoing.
Regional/China	Awards with Geely, BYD; low-voltage win (Volvo EX30) .	China growth via awards; outgrowth detail by region .	China consolidated lagged market but better incl. JVs; JV consolidation under review .	Increasing JV role; potential consolidation.
Backlog/awards	Record revenue; backlog supporting E-Systems .	Outgrowth continues; margin-accretive backlog .	2025 net new ~$230M (down), 2026 backlog up to ~$1.1B; 2025–2026 core backlog $1.3B; JV backlog $750M .	Pushouts in 2025, stronger 2026.

Management Commentary

“We are seeing the benefits from automation investments… expect approximately $75 million of cost savings in 2025, growing to an annualized savings of $150 million.” — Ray Scott, CEO .
“We do expect the first quarter to be the trough margin for the year… underlying run rate will improve quarter-to-quarter driven by the combination of automation and restructuring.” — Jason Cardew, CFO .
“We recently received approval from General Motors to incorporate Lear’s innovative ComfortMax seat solution… scheduled launch midyear 2025.” — Ray Scott .
“In 2025, we are again targeting 80% free cash flow conversion, which will enable us to buy back a minimum of $250 million worth of stock.” — Jason Cardew .
“EPS is on track to grow on average 19% per year from 2020 to 2025.” — Ray Scott .

Q&A Highlights

Seating competitiveness: Lear is leveraging modular designs and in-house automation to lower costs while protecting margins, positioning for market share gains without sacrificing returns .
Macro cadence: Decremental margins ~20% given mix; company focused on limiting downward conversion (≈$50M YoY at guided revenue decline) via automation/restructuring; Q1’25 is margin trough, improving thereafter .
Recoveries/capital discipline: Lear securing commercial recoveries for volume shortfalls and tempering capex on uncertain programs; repricing new programs keeps backlog margin-accretive .
E-Systems long-term margin: 8% still the right target over time, supported by restructuring and automation, despite recent labor inflation .
Tariffs exposure/mitigation: No tariff impact in guidance; imports to US were $2.9B (mostly Mexico), with coordinated industry approach and inventory builds to mitigate near-term risk .

Estimates Context

Wall Street consensus estimates (S&P Global) for Q4 2024 EPS and revenue were unavailable at the time of this analysis due to data access limitations. Values retrieved from S&P Global could not be displayed due to request limits. As a result, we cannot quantify beat/miss versus consensus for the quarter.

Key Takeaways for Investors

Near-term softness, better 2H cadence: 2025 revenue/margins guided flat-to-down on lower NA/EU volumes and backlog pushouts; Q1 is the trough with improving underlying run-rate through 2025 on automation/restructuring .
Margin drivers in place: ~$75M 2025 savings scaling to $150M annualized plus ~40 bps Seating and ~80 bps E-Systems net performance expected in 2025; exit 2025 ~5% total company core margin run-rate is a key milestone .
Product catalysts: ComfortMax launch on GM mid-2025 and INTU software award with Bentley support above-market growth and Seating margin accretion; monitor additional ComfortFlex/ComfortMax awards .
E-Systems trajectory intact: Despite Q4 mix headwinds, FY24 adj. margin improved to 5.1%; long-term 8% target reiterated—wire-harness automation (StoneShield) should aid execution .
China and JV strategy: Consolidated China growth lagging market is offset by strong JV contributions; potential JV consolidations could enhance reported growth/mix .
Capital returns resilient: 80% FCF conversion target maintained; ≥$250M buybacks planned for 2025 and dividend declared ($0.77/sh payable Mar 26, 2025) .
Watch tariff path: Guidance excludes tariff effects; management expects industry-wide solutions but intermittent disruptions are possible; monitor import exposure and customer recoveries .

Appendix: Prior Quarter Snapshots (for trend context)

Q3 2024: Revenue $5.58B; adj. EPS $2.89; core op earnings $256.6M; Seating adj. margin 6.4%, E-Systems adj. 5.0%; outperformed industry by 3 pts; accelerated buybacks ($209M) .
Q2 2024: Record revenue $6.01B; adj. EPS $3.60; core op earnings $302.0M; Seating adj. margin 6.8%, E-Systems adj. 5.3%; introduced ComfortFlex/ComfortMax; acquired WIP Industrial Automation .

Sources: Q4 2024 8-K earnings release and exhibits ; Q4 2024 earnings call transcript ; Q4 supporting press releases (ComfortMax, StoneShield, dividend) ; Q3 2024 press release ; Q2 2024 press release .

LEAR CORP (LEA)·Q4 2024 Earnings Summary