Lear Corp. posted net income of $1.2 billion in the fourth quarter of 2009, compared with a year-earlier loss of $688 million.
The improvement is mainly because of a $1.5 billion one-time gain from reorganization and “fresh start” accounting adjustments made when the company emerged from Chapter 11 in November. Even so, when interest, taxes and one-time items are excluded, Lear reported core operating earnings of $116 million, compared with $22 million in the fourth quarter of 2008.
Sales increased 5% to $2.7 billion as demand grew strongly in Brazil, India, China and Europe.
For the year, Lear recorded an $815 million profit compared with a $690 million loss in 2008. Core operating earnings shrank to $107 million from $418 million. Sales plunged to $9.7 billion from $13.6 billion because of the weak dollar and a sharp decline in auto production in Europe and North America.
The company generated $11 million in free cash flow in the fourth quarter, although it burned $156 million in cash in the full year to end 2009 with $1.6 billion in cash. During its four months in bankruptcy, Lear reduced its debt from $2.7 billion to $972 million.
The company continues to increase its business outside North America, which grew to 70% of net revenue from 64% in 2008, aided by rapid growth in developing markets. Sales in China jumped 58% to $1.3 billion in 2009.
For 2010, Lear forecasts core operating earnings will increase to $250 million-$350 million and sales will grow to $10.2 billion-$10.7 billion. Both measures would still be short of 2008 levels.