Auto parts supplier Lear Corp., which emerged from bankruptcy protection two days ago, said Wednesday it expects sales this year will total $9.5 billion, well below last year's results.
Southfield, Mich.-based Lear reported 2008 sales of $13.57 billion. The company, which filed for bankruptcy protection on July 7 and exited Chapter 11 on Monday, issued the forecast in a conference call.
Lear's four months under court protection enabled it to cut debt by about $2.8 billion, to $1 billion or less, with no near-term maturities. The restructuring also left the company, which supplies seats and electrical components for cars and trucks, with more than $1 billion in cash.
Lear forecast negative free cash flow this year of about $275 million, after reporting third-quarter positive free cash flow of $133.3 million. Free cash flow measures the cash a company can generate after laying out the funds required to maintain or expand its asset base.
Although Lear did not issue guidance for 2010, it said its sales backlog for 2010 to 2012 has grown to $1.4 billion despite the automotive industry downturn.
On Monday the company reported third-quarter profit of $24.6 million, or 32 cents per share, compared with a loss in the year-earlier period of $98.2 million, or $1.27 per share. Revenue in the three months ended Oct. 3 fell to $2.55 billion from $3.13 billion.
Lear is a key supplier to General Motors Corp. and Ford Motor Co., which make up 40 percent of its sales. Like other suppliers, its fortunes fell rapidly with the economic downturn and depressed U.S. auto sales. Lear was GM's ninth-largest creditor at the time of the automaker's bankruptcy filing on June 1, with $44.8 million in claims. Lear filed for bankruptcy protection a month later.