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A maker of car seats and electrical systems that supplies nearly every major automaker, Lear builds complete seat systems plus the wiring, power distribution, and electronic controls inside modern vehicles. Founded in 1917 in Detroit as American Metal Products, it stamped steel seat frames before being absorbed by Lear Siegler in 1966 and renamed Lear Corporation in 1996. The "Lear" name comes from that old conglomerate, not from Bill Lear of Learjet fame—a mix-up the company still clears up today.
Lear Q2 2026 E-Systems margin rose to 5.4% from 3.5% a year earlier as net income rose 17% to $192.8M.
margin climbed back above 5% after a year of decline. rose 3.0% to $6,209.4M and rose 23.9% to $3.79 as the 's margin expanded to 5.4% from 3.5% on lower and operating performance. The recovery in electronics earnings is underway, with $1.0B cash and $2.71B on the books.
Key takeaways
earnings rose 54% to $85M with margin at 5.4% versus 3.5% a year earlier, driven by favorable operating performance and lower , the clearest move in the quarter.
rose 3.0% to $6,209.4M as foreign exchange and new business more than offset lower production volumes on .
improved to 7.6% from 7.3% on favorable operating performance including restructuring benefits, net of selling price reductions.
Section summaries
Management's Discussion and Analysis
Lear Q2 FY2026 net income rose 17% to $193M on 3% sales growth, driven by favorable operating performance and E-Systems margin expansion.
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Consolidated increased 3% to $6.2B, with foreign exchange and new business more than offsetting lower production volumes on .
rose 16.7% to $192.8M and rose 23.9% to $3.79 ; rose 8.0% to $267.9M.
rose 55.5% to $460.5M from $296.2M a year earlier, driven by higher earnings and a improvement versus the first-half 2025 drop.
The company repurchased $175M of common stock and paid $81M in dividends; rose to $297M from $229M.
What changed
Q2 2026 margin reached 5.4%, up from the 3.5% Q2 2025 level and above the 3.1% full-year 2025 figure flagged as one to watch, though still below the 7.1% Q3 2020 benchmark.
Q2 2026 was $460.5M versus the $169M first-half 2025 figure that had dropped from $257M, settling the flagged cash flow concern with a rise from $296.2M.
Realized tariff costs on from Mexican or Honduran wire harness imports were not quantified in this filing; the risk factor section restates the 2025 annual report without update.
The ~$45M additional expected over the next twelve months flagged in Q1 2026 were not revised this quarter.
margin of 5.4% follows the Q1 2026 recovery to 5.2%, confirming the reversal of the decline that took the to 2.9% in Q3 2025.
What to watch
Q3 2026 margin against the 7.1% Q3 2020 level after the 5.4% Q2 figure
Any realized tariff cost on from Mexican or Honduran wire harness imports and degree of customer recovery
Q3 2026 after the $460.5M Q2 source
The ~$45M additional expected over the next twelve months and their impact
improved to 7.6% from 7.3%, primarily due to favorable operating performance including restructuring benefits, net of selling price reductions.
surged 54% to $85M with margin expanding to 5.4% from 3.5%, driven by favorable operating performance and lower restructuring costs.
were flat at $286M as favorable operating performance was offset by lower production volumes on .
increased significantly to $559M from $169M, driven by higher earnings and a $371M improvement in .
The company repurchased $175M of common stock and paid $81M in dividends, while rose to $297M from $229M.
Quantitative and Qualitative Disclosures About Market Risk
The company faces foreign exchange, interest rate, and commodity risks, hedging a portion with derivatives but not translational FX exposure.
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Primary transactional FX exposures are to the Mexican peso, various European currencies, Chinese renminbi, Moroccan dirham, and Honduran lempira.
A hypothetical 10% adverse FX move would cause a $285 million loss on outstanding contracts as of July 4, 2026, versus a $341 million gain on a 10% favorable move.
of foreign exchange contracts with maturities under 36 months was $2,953 million at quarter-end, down from $3,069 million at year-end 2025.
The company does not hedge , even though 77% of 2025 consolidated occurred outside the United States.
Derivatives are used only for hedging, not trading, and are executed with banks deemed creditworthy.
We are involved from time to time in various legal proceedings and claims, including, without limitation, commercial or contractual disputes, product liability claims, and environmental and other matters. For a description of risks related to various legal proceedings and claims…
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We are involved from time to time in various legal proceedings and claims, including, without limitation, commercial or contractual disputes, product liability claims, and environmental and other matters. For a description of risks related to various legal proceedings and claims, see Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2025. For a description of our outstanding material legal proceedings, see Note 15, "Legal and Other Contingencies," to the condensed consolidated financial statements included in this Report.