Visteon has reported a net loss of USD105m for the first quarter, but the result was an improvement on last year and exceeded analysts’ expectations.
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Visteon results included a USD40m loss associated with the sale of North American aftermarket facilities.
The Q1 loss of USD105m compares with a loss of USD153m in the same quarter of last year.
“Our first quarter results demonstrate the benefit of Visteon’s increased diversification of customer and geographic sales as well as significant operating improvement in our business,” said Michael F. Johnston, chairman and chief executive officer. “We expanded our margins and remain focused on additional cost reduction through the implementation of our restructuring plan and our overhead cost reduction initiative.”
Total sales for first quarter 2008 were USD2.86bn, a decrease of USD28m from the same period a year ago.
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By GlobalDataNorth American product sales declined USD144 million year-over-year to USD750 million, or 26 percent of total product sales. The impact of divestitures and plant closures, which decreased sales by USD153 million, and lower Ford and Nissan truck production were partially offset by new business.
European product sales decreased USD25m year-over-year to USD1.17bn, or 41 percent of product sales.
For first quarter 2008, Visteon’s operating loss was USD15m, an improvement of USD67m from the same period in 2007, reflecting improved gross margin and lower SG&A spending. The year-over-year improvement was driven by cost performance, restructuring savings and favorable currency in excess of customer pricing, Visteon said.
Visteon also said it ‘continues to address its operations in the United Kingdom’.
Visteon has a non-binding memorandum of understanding with Linamar Corporation for the sale of its Swansea, Wales, facility. Although the transaction has yet to be finalised and negotiations continue, Visteon has been able to mitigate the losses associated with the facility through agreements reached with customers supplied by the Swansea facility.
“We continue to improve our operations on a global basis as demonstrated in our first quarter results,” said Donald J. Stebbins, president and chief operating officer. “We are driving operational excellence and performance improvement throughout our global organization.”
Primarily due to a weaker U.S. dollar and the timing of divestitures, full-year 2008 product sales currently are expected to be in the range of USD10.0bn to USD10.2bn – an upward revision. Visteon also said that it expects EBIT-R for full-year 2008 to be in the range of negative USD25m to positive USD25m.
“The progress Visteon is making, combined with the additional actions we will execute in 2008, lays the foundation for Visteon to be free cash flow positive in 2009,” Johnston said. “With $1.6 billion of cash at March 31, 2008, and additional available liquidity, we have the flexibility to execute our plans.”
Visteon, which has been in a three-year restructuring it launched shortly after a bailout by former parent Ford Motor Co in 2005, said it remained on track to implement the restructuring and expected to generate savings of about USD215m over the next three years.
The company still derives about a third of its sales from Ford, but has expanded in Asia, which accounted for 29 percent of sales in the first quarter.
