By David Bailey

DETROIT (Reuters) - Auto parts maker Lear Corp (LEA.N: Quote, Profile, Research) posted a better-than-expected increase in quarterly earnings on Tuesday, supported by sales outside the slumping North American market, and its shares jumped 21 percent.

Lear, which has divested its auto interiors business to concentrate on seating and electronics, raised its full-year revenue forecast due to favorable foreign exchange rates while leaving its earnings forecast unchanged and cutting its outlook for North American auto industry production.

The company said North America business conditions remain challenging, with 2008 production forecast at the lowest level in 15 years, a consumer shift toward more fuel-efficient vehicles and increasing energy and commodity costs.

"This is the seventh quarter in a row where Lear's performance has surprised investors on the upside, clearly demonstrating the effectiveness of Lear's turnaround plan," Lehman analyst Brian Johnson said in a note to clients.

The company has been restructuring its operations to move business and production to lower-cost regions.

Net income rose to $78.2 million, or $1.00 per share, in the first quarter from $49.9 million, or 64 cents per share, a year earlier.

Excluding restructuring costs and expenses related to a supplier strike, Lear earned $1.34 per share. Analysts, on average, expected it to report earnings on that basis of 47 cents per share, according to Reuters Estimates.

Net sales fell to $3.86 billion from $4.41 billion due to the divestiture of the interiors business and lower North American auto industry production, caused in part by a strike at American Axle & Manufacturing Holdings Inc (AXL.N: Quote, Profile, Research) that has affected output at General Motors Corp (GM.N: Quote, Profile, Research).