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GM, F Problems Hammering Auto Parts Suppliers

Lear plunges on slashed Q1 outlook
By Shawn Langlois, MarketWatch
Last Update: 10:07 AM ET March 2, 2005
http://www.marketwatch.com/news/story.asp?guid=%7BE9605F98%2D67B8%2D4F6B%2D94A2%2D783551E55E14%7D&am...

SAN FRANCISCO (MarketWatch) -- Lear Corp. shares plummeted almost 15 percent Wednesday after the auto-parts maker a day earlier drastically slashed its quarterly financial outlook amid production cuts by its biggest automaker customers.

Lear (LEA: news, chart, profile) fell $7.76 to $45 after notching a new 52-week low of $44.57 shortly after the opening bell.

The Southfield, Mich.-based car-seat giant said it expects to "about breakeven" in its first quarter, well below its prior target of 50 cents to 70 cents a share. Analysts polled by Thomson First Call on average estimated a profit of 64 cents.



"While we expect 2005 to be challenging on several fronts, we do expect the industry production environment to improve later in the year following this near-term inventory correction," Lear Chairman Bob Rossiter said in a written statement.

Adding to Lear's woes, Ford Motor (F: news, chart, profile) and General Motors (GM: news, chart, profile) , the two largest U.S. automakers, posted lower February U.S. sales results Tuesday and scaled back first-quarter production schedules. See full story.

A wave of brokerage downgrades and sharply reduced price targets also piqued seller attention early Wednesday, with one analyst calling Lear's outlook "shockingly lower."

Lear is scheduled to report its first-quarter results April 22.