Lear Corp. (NYSE:LEA) shareholders have been on a roller coaster recently after successfully rebuffing Carl Icahn's bid just last month but things finally seem to be stabilizing. The auto-parts company posted strong second-quarter results today on cost-cutting and customer diversification moves. Some shareholders are confident that the company will be a strong independent performer while others are hoping for a raised bid for the company in the near future.

Lear has been following the lead of many auto suppliers by cutting down on its workforce by closing plants and moving more work to countries with lower labor costs to combat higher raw material costs and less demand from U.S. manufacturers. These efforts have led to operating margins improving to 7.7%  from 5.7% just one year earlier. The company also said it plans to intensify such moves and report improved operating results in 2008 despite even or lower sales.

Lear has also been focusing on gaining new business with Asian and other foreign automakers. Stronger production overseas combined with favorable exchange rates have helped the company's competitors, like TRW Automotive, post stronger results. Lear hopes to replicate this success for their own business by moving their operations offshore and focusing on international business development. Combined, these factors make LEA a stock worth watching!

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