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Visteon: profit expected in 2004

Auto parts maker Visteon Corp. said 8 January 2004 it expects to post a profit of USD 65 million to USD 130 million this year, a turnaround from the predicted loss for 2003.
For 2003, the former divi…

Auto parts maker Visteon Corp. said 8 January 2004 it expects to post a profit of USD 65 million to USD 130 million this year, a turnaround from the predicted loss for 2003. For 2003, the former division of Ford Motor Company said it expects to post a loss in the range of USD 1.13 billion to USD 1.25 billion, or USD 9 to USD 9.95 a share, including significant special charges related to restructuring and fixed-asset writedowns. “We expect 2004 will be a defining year for Visteon,” said chairman and chief executive Peter J. Pestillo. “Our expected improvement reflects new incremental business coming on stream in 2004, benefits of the recently announced commercial agreements with Ford, the non-recurrence of special charges and our ability to work with our union partners around the world to strengthen our results.” In December 2003, Ford and Visteon announced agreements aimed at dealing with pricing and cost-sharing issues between the two companies. Part of the deal involves 20,000 United Auto Worker-represented Ford employees assigned to Visteon, who will return to Ford as jobs become available. Visteon will then be free to hire new UAW workers at lower wages to cover these positions. Ford agreed to assume USD 1.65 billion of Visteon“s post-retirement health care and life insurance obligations for those workers. The automaker also will share costs of up to USD 200 million to help Visteon upgrade its information and technology systems. For its part, Visteon committed to a schedule of annual price reductions for Ford, its main customer, over the next four years. Visteon said it expects to report revenue in 2004 of USD 18.6 billion, up USD 1 billion from 2003, reflecting growth in non-Ford business. Non-Ford revenue is expected to reach approximately USD 5.1 billion, or 27% of the total. For the 4Q of 2003, Visteon said it expects to report a net loss in the range of USD 780 million to USD 900 million, or USD 6.20 to USD 7.15 a share, on revenue of USD 4.4 billion. The loss includes special items that total USD 700 million to USD 800 million, or USD 5.55 to USD 6.35 a share. In a research note 8 January 2004, Merrill Lynch analyst John Casesa said he was keeping his neutral rating on Visteon stock. “Visteon is a developing internal turnaround story, now getting a boost with Ford“s assistance,” he said. “The missing ingredient remains volume, and particularly, Ford“s volume, which remains under pressure.” Visteon is scheduled to release 4Q and full-year results on 23 January 2004.

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