Auto seating and electronics supplier Lear Corp. is seeing a drop in revenue and sales for the third quarter of 2018, reflecting a slowing auto market.
"The industry looks very different today than it did at the beginning of the year," Lear CEO Ray Scott said during a quarterly conference call with analysts.
Lear posted third-quarter revenue of $4.9 billion, down about 2 percent from a year ago. Net income was $253 million, down 15 percent.
Chief Financial Officer Jeff Vanneste put the blame on the difficulty in predicting short-term changes in production volumes.
"It's a slippery pig right now; it's hard to catch," he said in an Oct. 25 conference call for the Southfield, Mich.-based company. "Production declines come quick, and they can come deep."
The latest global production forecast for 2018 is 94.1 million, according to IHS Markit, Lear said. That's an improvement from 93.4 million in 2017, but it's about 1 percent lower than IHS Markit's forecast in July, Lear said.
In major markets, including China and Europe (including Africa), the latest forecast is 2 percent lower than previously expected. In North America, it is 1 percent lower than expected, the company said.
Accordingly, Lear cut its sales forecast for 2018 to a range of $21 billion to $21.2 billion. At the middle of the range, that's a cut of $800 million from Lear's previous guidance, but it's still $633 million higher than 2017, the company said.
"The U.S. economy remains very strong. Leading economic indicators are positive," Scott said.
Seating, Lear's traditional business, still accounted for 75 percent of Lear revenue in the third quarter, but Lear's E-Systems electronics segment is growing, to 25 percent in the third quarter, up from 22 percent a year ago.
Lear said 35 percent to 40 percent of new business the company is winning is in electronics, which is a higher share than electronics represents in today's business mix.
Lear uses foams and plastics in its seating business and plastics in electronics.