On the surface, Visteon Corporation fourth-quarter results for 2005 look like a bit of a turn-around – net income of US$1.338bn, or $10.25 per share, on total sales of $2.9bn.
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That’s at the top of today’s press statement. But, a few lines down, comes this: “Visteon’s net income of $1.338bn for the fourth quarter of 2005 included a gain of $1.8bn related to the ACH transactions”. That’s the 1 October last sale of 23 North American facilities, grouped as part of the newly-created Automotive Components Holdings, to one-time biggest customer and owner Ford.
So, regrettably, a miracle reversal can’t be reported, at least not this quarter.
For comparison, in the fourth quarter of 2004, Visteon reported a net loss of $138m.
For full year 2005, the struggling components maker reported a net loss of $270m, or $2.14 per share, on total sales of $17.0bn, though that’s a substantial improvement on 2004’s net loss of $1.5bn.
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By GlobalData“With the Ford transaction completed, we are now focused on implementing our multi-year plan to restructure Visteon and improve our earnings and free cash flow,” said chairman and chief executive officer Michael Johnston.
What else would they be doing if the company is not to sink without trace?
Added Johnston: “For 2006, we are increasing our outlook for earnings and reaffirming our outlook for positive free cash flow. We are also reiterating our expectation for continued improvement in 2007 and beyond.”
Fourth Quarter
Q4 product sales reached $2.7bn and services revenues $164m. More than half of the product sales were to customers other than Ford, a significant increase over last year. Q4 sales a year ago were $4.7bn, of which non-Ford business took 33%.
Visteon said sales were lower mainly due to that transfer of 23 North American facilities back to Ford, lower Blue Oval vehicle production in North America and price reductions.
That $164m in revenue came from services supplied to ACH under various agreements made between the new company and Visteon.
Full year
Sales for all of 2005 totaled $17.0bn, including product sales of $16.8bn (compared with $18.7bn a year before) and services revenues of $164m. Ford-related sales accounted for 62%.
The 2005 results were inclusive of previously announced non-cash asset impairment charges of about $1.2bn and $46m of restructuring expenses.
Outlook
Visteon has upped its estimate of 2006 pre-tax full-year earnings to a range of $45m to $75m.
It forecast product sales of approximately $11.2bn, 58% non-Ford.
