Visteon Corporation has reported greatly improved second quarter 2006 net income of $US50m or $0.39 per share compared to a loss of $1.2bn or $9.85 per share in the second quarter 2005.
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Sales were $2.86bn and services sales were $138m compared with total sales a year previously of $5.0bn. Product sales were lower by $2.14bn due to the 1 October 2005, deal with former parent Ford that transferred 23 Visteon facilities to Automotive Components Holdings (ACH), a Ford-managed business entity.
Net income of $50m included $22m of non-cash asset impairments related to the company’s restructuring actions and an extraordinary gain of $8m associated with the acquisition of a lighting facility in Mexico.
The components maker also booked a $49m benefit in the quarter related to the relief of post-employment benefits for Visteon salaried employees associated with two ACH manufacturing facilities transferred to Ford.
Income tax expense of $17m in the quarter included a $14m benefit from the restoration of deferred tax assets related to the company’s Brazilian operations.
“We are pleased with our strong second quarter results and our momentum in implementing our three-year plan,” said Visteon chairman and CEO Michael Johnston. “Our operating results were better than both the second quarter of 2005 and the first quarter of this year, and we continue to make solid progress in our restructuring efforts, in improving our base operations and in growing our global business.”
For the first half of 2006, product sales were $5.7bn and services sales were $283m with over half of the product sales generated from customers other than Ford, showing continued progress in diversifying Visteon’s customer base.
Sales for the same period a year ago were $10.0bn, of which non-Ford sales were 35%. Product sales were lower by $4.3bn due to the sale of plants in North America to ACH completed lat October.
Visteon’s net income of $53m, or $0.41 per share, for the first six months reflects improved operating performance and the financial benefit of the ACH transactions with Ford.
The half year results include $22m of non-cash asset impairments related to the company’s restructuring actions and an extraordinary gain of $8m associated with the acquisition of the lighting facility in Mexico.
Also, as previously announced, Visteon booked a cumulative benefit of $72m in the first half related to the relief of post-employment benefits for its salaried employees associated with two ACH manufacturing facilities transferred to Ford.
Visteon reported a net loss of $1.401bn or $11.15 per share in H1 2005, including $1.176bn, or $9.36 per share, of non-cash asset impairments.
In a statement, Visteon said: “Third quarter 2006 is expected to be challenging, reflecting seasonally low production volumes globally”. It expects full-year product sales of approximately $11.0bn but did not provide a net income estimate.
