Visteon Corporation preliminary results for the fourth quarter and full year 2004 show a net loss of $US115 million, or $0.92 per share for the quarter, and a net loss of $1.489 billion, or $11.88 per share for the full year.
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The quarterly result includes $41 million of after-tax special charges related to costs associated with a current US salaried employee voluntary redundancy programme, while the full year result includes non-cash write-downs of $871 million for increased valuation allowances against deferred taxes, $314 million for asset impairment write-downs, and $78 million for other special charges. These items total $1.263 billion after tax, or $10.08 per share.
For fourth quarter 2003, Visteon reported a net loss of $829 million, or $6.60 per share and, for full year 2003, a net loss of $1.190 billion or $9.46 per share.
The 2004 results are preliminary because the partsmaker, spun off several years ago from Ford, recently discovered accounting errors in retiree health care and pension benefits, and income taxes, and is still assessing the effect of these.
For fourth quarter 2004, Visteon reported revenue of $4.7 billion, up 5% compared with the same period in 2003. These results were driven by a 35% increase in non-Ford revenue. Non-Ford revenue for the quarter totalled a record $1.6 billion, up more than 7% from the last year.
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By GlobalDataFor full year 2004, revenue reached $18.7 billion, up $1 billion compared to 2003, despite a $460 million decline in Ford revenue. Non-Ford revenue reached a record $5.7 billion, up 36%, while non-Ford revenue represented 30% of total revenue.
“Our record non-Ford revenue growth in 2004 exceeded our expectations and serves as testament to the innovative products customers are counting on us to deliver,” said Visteon president and CEO Mike Johnston.
“Our new business wins in 2004 continue to be in the growth products that are core to our success – interiors, climate and electronics, including lighting. We’ve strengthened our competitive position to serve customers around the globe by opening and expanding technical centres in every region.
“We have implemented programs to reduce headcount and costs in the United States, but material surcharges and lower North American Ford production have put significant pressure on our operating results. As we announced last September, we are exploring strategic and structural changes to our US operations to achieve a sustainable and competitive business. We are having constructive and ongoing discussions with Ford about such changes.”
2005 Outlook
In a statement, Visteon said it is not providing specific guidance “because of the uncertainty surrounding future market and economic conditions”, and while it is “exploring strategic and structural changes to its business in the United States that would involve Ford and Visteon’s legacy businesses”.
“In light of mounting challenges facing our business, we are identifying actions to improve the company’s cost structure and cash position,” said Johnston. “In addition to our strategic and structural discussions with Ford, we are taking actions to focus capital and engineering resources to growth areas only, and minimise the impact of material surcharges.”
Visteon also said its board will meet on February 9 to discuss possible modification or suspension of its dividend payment.
