Visteon fourth quarter net income up 72% despite lower revenue
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Michigan-based automotive electronics supplier Visteon Corp. posted a 72% increase on net income of US$43 million during the fourth quarter of 2018 despite a 9% decrease in revenue of US$731 million.
Net income increased due to a one-time charge of US$33 million for divestitures during last quarter of 2017. The company's income tax provision for last quarter was US$1 million, compared with US$14 million a year earlier. Visteon’s adjusted earnings during the quarter dropped 27% to US$74 million.
Much of the revenue decrease was the result of unfavorable vehicle production volumes, customer pricing and unfavorable currency impacts.
“2018 was a challenging year due to a weak market, especially in the second half, which reduced vehicle production volume at our customers. Besides the sharp drop in vehicle sales and production in China, our key customers in North America and Europe were impacted by the move away from sedans in the U.S. and the troubles with diesel in Europe,” said Visteon president and CEO Sachin Lawande at the conference call.
On a regional basis, in the fourth quarter of 2018 Europe accounted for 29% of sales; China domestic sales 16%; China exports 9%; the Americas 24%; and other Asia-Pacific countries 22%.
Full-year revenue fell 5% to US$2.98 billion, while net income slipped 7.3% to US$164 million. Revenue from new product launches increased in 2018 and offset the phaseout of older products.
Global vehicle manufacturers in 2018 awarded Visteon new business of US$6.9 billion, driven by new digital products, primarily all-digital clusters and audio infotainment. Last year the company launched 34 new products in China alone.
“We launched the industry's first production cockpit domain controller with Daimler and secured significant new business wins in the fast-growing digital cluster and infotainment segments,” Lawande said. “By winning approximately US$7 billion in new business for the second consecutive year — and adding five new customers in the process — we strengthened Visteon's position toward achieving our long-term growth targets."
Visteon’s full-year 2019 outlook remains with sales in the range of US$2.90 billion to US$3.00 billion, adjusted EBITDA in the range of US$280 million to US$310 million, and adjusted free cash flow in the range of US$80 million to US$100 million.
Visteon operates four manufacturing facilities in Mexico, two in Chihuahua’s state capital and two more in Reynosa, Tamaulipas. It also owns a Technical Center in Queretaro which develops user interfaces (UI) software for automotive applications.