USA: Visteon loses $US1.2 billion in second quarter

By just-auto.com editorial team | 8 August 2005

Visteon Corporation on Monday announced a preliminary second quarter 2005 net loss of $US1.2 billion, or $9.49 per share, on sales of $5.0 billion.

No year-ago comparative figures were provided.

In a statement, Visteon said the preliminary results include previously announced non-cash fixed asset impairment charges of $1.1 billion, or $9.01 per share.

The result is unaudited and subject to change because, as announced last May 10, Visteon's audit committee is having an independent review of accounting for certain transactions in the parts maker's North American purchasing activities and hasn't yet determined if further adjustments may be required to the preliminary financial results, or those for any previous accounting period.

Non-Ford sales for the second quarter 2005 grew by $401 million, or 29%, compared with Q2 2004, to an all-time high of $1.8 billion and represented 36% of total sales.

Ford sales decreased more than 7% to $3.2 billion, primarily reflecting lower production levels in North America and Europe.

Currency favourably impacted total sales by $120 million.

"Our customer diversification continues as non-Ford sales were 36% of total sales in the second quarter and we continue to win new business with these customers in our key growth products," said Visteon chairman and CEO Mike Johnston.

"We also took a major step toward addressing a number of structural challenges in the company's North American manufacturing operations by signing the memorandum of understanding with Ford. The Ford transaction will allow us to focus our efforts and resources to support our global customers in the core areas of electronics, interiors and climate and to take the required actions to improve our financial performance."

Visteon said that, compared a year ago, second quarter 2005 results were adversely impacted by lower Ford production volumes, price reductions and increased reserves for Tier 1 customer bankruptcies. The results were, however, positively impacted by the benefits of the Ford funding agreement reached in March 2005 as well as other net cost efficiencies - the agreement reduced the wage reimbursement to Ford for Visteon-assigned Ford/UAW hourly employees.