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Visteon announces third-quarter 2017 results

Visteon Corporation (NYSE: VC) today announced third-quarter 2017 results, reporting sales of $765 million, compared with $770 million in the third quarter of 2016. Third-quarter net income attributable to Visteon was $43 million or $1.35 per diluted share for 2017, compared with $28 million or $0.81 per diluted share for 2016. Third-quarter Electronics sales were … Continued

Visteon Corporation (NYSE: VC) today announced third-quarter 2017 results, reporting sales of $765 million, compared with $770 million in the third quarter of 2016. Third-quarter net income attributable to Visteon was $43 million or $1.35 per diluted share for 2017, compared with $28 million or $0.81 per diluted share for 2016.

Third-quarter Electronics sales were $765 million, compared with $749 million for the same period in 2016. Electronics third-quarter net income was $43 million or $1.35 per diluted share for 2017, compared with $38 million or $1.10 per diluted share for 2016.

Electronics adjusted EBITDA, a non-GAAP financial measure as defined below, was $83 million for the third quarter, compared with $75 million in the same period last year. Electronics adjusted net income, a non-GAAP financial measure as defined below, was $45 million for the third quarter or $1.42 per diluted share, compared with $38 million or $1.10 per diluted share in the third quarter of 2016.

On a year-to-date basis through the third quarter, global vehicle manufacturers awarded Visteon new business of $4.6 billion in lifetime revenue. The ongoing backlog, defined as cumulative remaining life-of-program booked sales, was $18.0 billion as of Sept. 30, 2017, up from $16.5 billion at the end of 2016.

“We continued our momentum in the third quarter with very solid performance, including improved year-over-year Electronics sales and adjusted EBITDA,” said Visteon President and CEO Sachin Lawande. “This marks our 11th consecutive quarter of year-over-year improvement in adjusted EBITDA margin, underscoring the strength of our technology and our discipline in managing operational costs.”

Lawande added: “New business wins remained strong, highlighted by our first Phoenix™ infotainment win set to launch in 2020. Overall, we grew our Audio/Infotainment wins by over 150 percent year-to-date compared with the prior year. Based on our overall new business wins, we are on track to meet our long-term growth targets.”

Third Quarter in Review

Visteon Corporation

Third-quarter sales were $765 million, compared with $770 million for the same period in 2016. The $5 million decrease is primarily related to the exit of other operations, partially offset by higher Electronics production volumes, new product launches and favorable currency.

Gross margin was $116 million, compared with $105 million a year earlier. The $11 million increase reflected higher gross margin related to the Electronics Product Group. Selling, general and administrative expenses were $54 million for the third quarter of 2017, compared with $53 million for the third quarter of 2016.

For the third quarter of 2017, the company reported net income attributable to Visteon of $43 million or $1.35 per diluted share, compared with $28 million or $0.81 per diluted share for the same period in 2016. The $15 million increase in net income includes improved gross margin and the non-recurrence of charges associated with other operations divested in 2016, partially offset by an increase in income taxes and the non-recurrence of 2016 discontinued operations income.

Electronics Product Group

Sales totaled $765 million and $749 million during the third quarter of 2017 and 2016, respectively, for an increase of $16 million, resulting from new product launches and favorable currency movements, partially offset by customer pricing reductions. On a regional basis, Asia accounted for 42 percent of sales, Europe 30 percent, North America 26 percent, and South America 2 percent.

Gross margin for the third quarter of 2017 was $116 million, compared with $105 million a year earlier. The $11 million increase reflected the impact of higher sales volume, material and engineering cost efficiencies, and favorable currency, partially offset by customer pricing and unfavorable product mix.

Adjusted EBITDA for the Electronics Product Group was $83 million for the third quarter of 2017, compared with $75 million for the same quarter last year. The improvement was primarily driven by favorable cost performance including material and engineering cost efficiencies, partially offset by customer pricing and unfavorable product mix. Adjusted EBITDA margin was 10.8 percent for the third quarter of 2017, 8 basis points higher than the prior year.

For the third quarter of 2017, net income was $43 million or $1.35 per diluted share, compared with net income of $38 million or $1.10 per diluted share for the same period in 2016. Third-quarter 2017 restructuring charges, partially offset by legacy operations benefits, reduced net income. Adjusted net income, which excludes these items, was $45 million or $1.42 per diluted share for the third quarter of 2017, compared with $38 million or $1.10 per diluted share for the same period in 2016.

 

Other Operations

By the end of 2016, Visteon exited its other operations, consisting of climate operations in South America and South Africa. The third quarter of 2016 included sales of $21 million and a net loss of $13 million.

Cash and Debt Balances

As of Sept. 30, 2017, Visteon had cash and equivalents totaling $735 million. Total debt as of Sept. 30 was $391 million.

For the third quarter of 2017, cash from operations was $45 million and capital expenditures were $22 million. Total Visteon adjusted free cash flow, as defined below, for the third quarter of 2017 was $33 million, compared with $25 million during the third quarter of 2016. Year-to-date, adjusted free cash flow was $90 million.

Share Repurchases

During the first nine months of the year, the company repurchased 1,741,979 shares at an average price of $97.59. A total of $230 million remains available under the company’s share repurchase authorization. As of Sept. 30, 2017, the company had 31.7 million diluted shares of common stock outstanding.

Full-Year 2017 Outlook

Visteon updated its full-year 2017 guidance with sales in the range of $3.12 billion to $3.16 billion, adjusted EBITDA in the range of $360 million to $370 million, and adjusted free cash flow in the range of $170 million to $180 million.

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