DETROIT (Reuters) - Auto parts supplier Lear Corp said on Thursday it would split its stock two-for-one, begin a $400 million share buyback program and start paying a quarterly dividend, steps that show its progress in shoring up its balance sheet after a 2009 bankruptcy.
The supplier of auto seating systems and electrical systems said it would pay a quarterly dividend of 25 cents per share on a pre-split
basis.
Lear, which emerged from bankruptcy in November 2009, has benefited from a reduction in costs and production capacity and a rebound in global auto production over the past 18 months.
Shares in Lear were up 1 percent in early trading. The stock has gained over 60 percent since May 2010.
Based on its shares outstanding before the split, the new quarterly dividend will cost Lear almost $53 million annually.
The share buyback program runs until February 2014.
One analyst said the moves by Lear would help improve both investor interest and liquidity in the stock, which crossed the $100-per-share threshold earlier this month. In early trading, Lear's shares were up $1.76 or 1.6 percent to $112.89.
"We view this announcement favorably and are encouraged to see (Lear) return cash to shareholders in the form of both dividends and share repurchase," KeyBanc Capital Markets analyst Brett Hoselton said in a note for clients.
"Additionally, we view the stock split positively as it increases liquidity in the stock," he said.
(Reporting by Kevin Krolicki, editing by Gerald E. McCormick)
