Parts is Parts? CFO at Lear Corp. Steps Down

Finance chief to take another job at auto-parts maker. Plus: E&Y veteran hired at LifePoint Hospitals, former IBM finance exec goes to IMS Health.
Jennifer CaplanOctober 25, 2001
  • Donald Stebbins, CFO of Lear Corp., is leaving to become EVP of the company’s operations in North and South America. Lear’s vice chairman, James Vandenberghe, will take over Stebbins’s financial responsibilities.

    A management shuffle is not overly surprising, given the company’s recent performance. Along with other auto-parts producers, Lear has been hard hit by tumbling car production in a depressed economy. In the wake of September 11, Ford (one of Lear’s largest customers) announced it would reduce its output by about 13 percent and stop production at five North American assembly plants. The attacks also caused shipping delays. Worse, it sparked fears that consumers will continue to put off making large-ticket-item purchases — not exactly great news for automakers or their suppliers.

    Although Lear was able to beat Wall Street expectations in the third quarter by 2 cents, the company reported sharply lower profits. It earned $15.7 million (24 cents per share), compared with $38.6 million (59 cents per share) in the same period of 2000. Excluding a one-time charge of $7.3 million for early redemption of notes, the company earned $38.6 million, or 35 cents per share. Thomson Financial/First Call’s consensus estimate for the quarter was 33 cents per share. Revenues in Q3 slipped to $3.11 billion from $3.14 billion for the same period last year. Executives at Lear blamed the lower profits on a decrease in automotive production, unscheduled downtime at customer assembly plants, and a slowing economy.

    Lear management expects net sales in fourth quarter 2001 to be 3 to 5 percent lower than net sales in fourth quarter 2000, with earnings coming in somewhere between 95 cents and $1.15 per share. The Thomson consensus for expected fourth-quarter earnings? $1.15 per share.

    To offset the drop in revenues, Lear recently announced a restructuring plan that could result in plant closures. A $150 million restructuring charge will be taken in the fourth quarter. Lear employs more than 100,000 workers in 300 facilities located in 33 countries.

  • Nancy Cooper was hired as the CFO at IMS Health Inc., a provider of prescription data to pharmaceutical manufacturers. Cooper replaces James Malone, who is retiring.

    Cooper joins the Fairfield, Connecticut-based company from Reciprocal Inc., a digital distribution infrastructure specialist, where she served as CFO since July 2000. From 1998 to 2000, Cooper was CFO of Pitney Bowes Inc.’s Credit Corp. unit. Prior to that, she spent 22 years at International Business Machines Corp. in various positions, including CFO for IBM’s Global Industries Division.

    Cooper’s hiring is the second big appointment in the IMS finance department this month. Leslye Katz was hired as vice president and controller in early October. Katz joined the company from American Lawyer Media Inc., a legal journalism and information company, where she served as vice president and finance chief since 1998.

    IMS Health will need strong financial management over the coming months. A day after reporting disappointing revenue growth last week, the share price of IMS stock tumbled 17 percent. Revenues in the third quarter rose by only 4 percent, considerably lower than the 12 percent growth that analysts expected. On a more upbeat note, quarterly earnings rose to nearly $82 million, a 15 percent jump from the same quarter a year ago.

  • Sherrill Neff, president and CFO of Neose Technologies Inc., announced his resignation. Neff is leaving the Horsham, Pennsylvania-based biotech company to manage Quaker Health Ventures, a life sciences venture fund. He will remain on the board of directors at Neose. A. Brian Davis, the director of finance, has been appointed acting CFO until a replacement is found. Neose has hired search firm Spencer Stuart to help find a permanent finance chief.

    Losses at Neose widened in the second quarter, reaching $5.2 million, a big increase from the $2 million loss recorded in Q2 of 2000. Second-quarter revenues also declined substantially, to $292,000. During the same quarter the year before, Neose reported turnover of $1.8 million. At the end of the second quarter, Neose had $85.9 million in cash and marketable securities.

  • Officials at rural hospital chain LifePoint Hospitals Inc. hired Michael Culotta as chief financial officer. Culotta will replace Kenneth Donahey, who was appointed chairman and CEO earlier this year.

    Culotta joins the company after 25 years with Ernst & Young LLP. He currently serves on the board of directors for the Nashville Ballet, and has also served as chairman of the board of the Tennessee Valley region of the American Red Cross Blood Services.

    The share price of Lifepoint Hospitals’s common fell nearly 13 percent on Tuesday — this, despite beating analysts’ third- quarter earnings estimates by a penny. Earnings at Lifepoint came in at $7.5 million (20 cents per share) for the third quarter, 1 cent above Thomson Financial/First Call’s estimate of 19 cents per share. Investors nevertheless punished the company, mostly because it did not show strong revenue growth per patient at facilities open more than a year, according to a Reuters report.