Lear executives expect company performance to improve despite failed merger agreement

By Jennifer Lanning Drey

Portland, Ore., Aug. 2 - Lear Corp. executives said they are confident in the company's ability to perform as a stand-alone, publicly traded entity following shareholder rejection of a proposed merger with American Real Estate Partners LP.

"Lear is financially sound and our first-half results are solid and will continue to a solid year," said James Vandenberghe, Lear's chief financial officer, during the company's second-quarter earnings conference call held Thursday.

"We can continue as a publicly traded company, and we believe there's a positive long-term outlook," Bob Rossiter, Lear's chief executive officer, said during the call.

Lear's board and management are focused on executing the company's strategic improvement plan, he added.

During the second quarter, the company continued to make progress on its global restructuring, including actions related to low-cost country sourcing, capacity alignment and further administrative consolidation, Rossiter said.

"While the North American industry outlook remains challenging, we will continue to implement actions to strengthen our long-term competitiveness," Vandenberghe said.

The company said improved earnings and lower capital spending allowed it to generate free cash flow of $204 million in the second quarter, up from $800,000 in the same period of 2006.

Free cash flow is expected to be about $275 million for the year, according to a company news release.

Lear reported net income of $123.6 million for the second quarter, compared with a net loss of $6.4 million for the second quarter of 2006.

Lear is an automotive interior systems and components supplier located in Southfield, Mich.

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