Lear Swings to Loss Amid Drop in Parts Demand

Southfield, Mich. -- Auto parts supplier Lear (LEA Quote) posted a fourth-quarter loss on Thursday as automakers slashed production that sent sales sliding.

Lear, which makes automotive seating, electrical distribution systems and electronics products, said it lost $688.2 million, or $8.91 per share, in the quarter ended Dec. 31. It earned a profit of $27 million, or 34 cents per share, in the same quarter last year.

Sales tumbled 33% to $2.6 billion from $3.86 billion.

The company said it took numerous one-time charges, including a $530 million goodwill impairment charge and a $66.2 million restructuring charge. Excluding those charges, the company said it earned $22 million in the fourth quarter.

Analysts polled by Thomson Reuters expected a loss of $1.21 per share on $2.8 billion in sales, on average. Such estimates typically exclude one-time items.

Shares of Lear plunged 12 cents, or 10.4%, to $1.03 in premarket trading.

The company called the business environment during the quarter "extremely challenging." It said North American production fell 26%, while production at the company's top five customers fell 31%.

"Lear's strategy to manage through the downturn is to accelerate and expand global restructuring and cost reduction efforts, to narrow our investment focus to minimize cash burn and to continue to provide our customers with superior value," said Bob Rossiter, Lear's chief executive, in a statement.

Lear said it was no longer in compliance with the debt ratio in its primary credit facility after electing not to pay back $1.2 billion in borrowings last year. Because of this, the company said it intends to seek a long-term amendment to its credit facility.