Visteon posts quarterly net loss of $39 million

DETROIT (Reuters) -- Parts maker Visteon Corp. posted a quarterly net loss today, hurt by vehicle production cuts in North America by former parent and largest customer Ford Motor Co.

Visteon reported a net loss of $39 million for the fourth quarter, compared with net income of $1.3 billion a year earlier, when it recorded a gain from the sale of facilities to Ford.

The net loss includes reimbursable restructuring expenses and other costs of $71 million and a net tax benefit of $32 million.

JP Morgan analyst Himanshu Patel said while the loss was much lower than expected, much of the upside came from the tax benefit.

Revenue was little changed at $2.84 billion, and product sales were also flat at $2.71 billion as favorable currency exchange rates and increased sales in Asia were offset by lower production volumes, principally in North America, Visteon said.

The Van Buren Township, Mich.,-based company said product sales to non-Ford customers rose 13 percent to $1.62 billion and represented 60 percent of total product sales.

Cash from operating activities for the fourth quarter was $239 million, an increase of $197 million over the same period a year earlier.

Visteon said in January it expected 2007 to be challenging due to production cuts by Ford on some key vehicles for which it supplies parts in North America and Europe. Operational and financial results are expected to improve in 2008.

Ford, which spun Visteon off in 2000, bought back money-losing business and high-wage workers from Visteon in 2005 and agreed to help finance further restructuring.

SALARIED CUTS

Visteon said 800 salaried jobs were cut as part of the salaried reduction program announced in October and costs associated with the separation were $19 million.

The company expects to complete the salaried reduction program by the end of March and expect savings of about $65 million a year.

In January, Visteon said that it expects product sales of about $11.1 billion in 2007. Visteon also said it expects 2007 results to range from break-even to a loss of $100 million, before net interest expense, income taxes and extraordinary items, and excluding unreimbursed restructuring costs and impairment of long-lived assets.

The company expects free cash flow to be negative in 2007 and 2008 before turning positive in 2009.

A year ago, Visteon said it would need to fix, sell or close 23 facilities through 2009 for that additional restructuring, but in January raised that to 30 facilities and said it would probably need to shut more plants in 2010.

Visteon plans to focus on interiors, climate controls and electronics where new business is concentrated. Most U.S. auto parts makers have been restructuring due to market share losses by U.S.-based automaker customers and high commodity costs.

On Tuesday, Visteon named William Quigley chief financial officer effective March 9, succeeding Jim Palmer, who has been named CFO of defense contractor Northrop-Grumman.

Visteon was eighth on the Automotive News ranking of the top suppliers in 2005 with $15.8 billion in sales to auto manufacturers globally.

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