Visteon sees wider-than-expected loss suffering ford“s production cuts

US glass and auto parts producer Visteon Corp. swung to a wider-than-expected loss in the third quarter amid a sharp sales decline, hampered by lower vehicle production from Ford Motor Co., its main c…

US glass and auto parts producer Visteon Corp. swung to a wider-than-expected loss in the third quarter amid a sharp sales decline, hampered by lower vehicle production from Ford Motor Co., its main customer. The auto-parts supplier, which was spun off by Ford last year, reported a net loss of US$ 95 million, or 74 cents a basic share, compared with a year-earlier profit of US$ 48 million, or 37 cents a share. Results in the latest quarter included a US$ 21 million charge related to the voluntary retirement and separation programmes offered to hourly employees located at its Nashville Glass plant. The programmes resulted in the retirement of about 245 employees. Excluding the charge, Visteon lost US$ 74 million, or 57 cents a share. That was steeper than the loss of 49 cents a share expected by analysts surveyed by Thomson Financial/First Call. Visteon“s sales fell 15% to US$ 3.72 billion from US$ 4.4 billion, primarily because of lower revenue from Ford. Revenue not from Ford was down only US$ 12 million from a year earlier, the company said, despite lower industry volumes and unfavourable currency changes. Visteon lowered its third-quarter guidance for the second time in October after Ford announced it would take 110,000 to 120,000 units out of its third-quarter North American production schedule. At that time, Visteon said it expected to post a loss, excluding restructuring charges, of US$ 60 million to US$ 70 million, compared with a July projection of break-even earnings before charges on revenue of US$ 4.1 billion to US$ 4.3 billion. “It was a difficult quarter. Our results reflect unexpected and sharp production cuts late in the quarter, accompanied by an unfavourable vehicle production mix,” Peter J. Pestillo, Visteon“s chairman and chief executive, said in a prepared statement. “On the positive side, strong new business wins continue and our aggressive programme of cutting costs and spending will make us stronger in the future.” Despite recent difficulties, the company said it ended the quarter in a solid financial position with almost US$ 1 billion in cash and marketable securities. So far this year, Visteon said it has won US$ 1.6 billion in new business from more than a dozen global auto makers. About 75% of the new business is with customers other than Ford. Visteon added that it is difficult to forecast what near-term results will be, because of the uncertain industry outlook, but it expects to provide a fourth-period outlook later in the current quarter. Towards the end of November, auto-parts makers Dana Corp. and Delphi Automotive Systems Corp. reported sharp declines in their profits and sales for the latest quarter because of the downturn in vehicle production from auto makers following the 11 September terrorist attacks.