DETROIT - Visteon Corp. on Thursday posted a second-quarter profit on higher sales to customers other than former parent Ford Motor Co., but its shares fell more than 5 percent as the automotive parts supplier cut its full-year outlook.
The No. 2 U.S. parts maker lowered its full-year estimates on production cuts at Ford, which accounts for about 70 percent of its sales.
"Our guidance now includes a Ford North American vehicle production forecast of 3.65 million units, down from our prior guidance of 3.7 million units," Visteon CFO Jim Palmer told reporters and analysts on a conference call.
Analysts said Visteon's lowered outlook appeared optimistic nonetheless, given bloated inventories at Ford dealerships.
"We believe that Visteon is likely to miss fourth quarter and full-year guidance, mostly on our view of a shortfall in Ford production in the fourth quarter versus Visteon's expectation," said Gary Lapidus, analyst with Goldman, Sachs & Co., in a note to clients.
Visteon's outlook is based on Ford producing about 937,000 vehicles in the fourth quarter, up from 900,000 units a year earlier.
Dearborn, Mich.-based, Visteon said it now expects to earn between 60 cents and 90 cents a share from its earlier estimate of 70 cents to $1.10.
Full-year results include expected pre-tax special charges of about $50 million.
Visteon also said it expected to post a wider-than-expected third-quarter loss between $90 million and $105 million, or 70 cents to 80 cents a share.
NON-FORD SALES RISE
In the second quarter, Visteon had net income of $31 million, or 24 cents a share, compared with a net loss of $167 million, or $1.33 a share, a year earlier.
The parts maker has been trying to diversify its business since Ford spun it off in 2000, and has been in a restructuring mode ever since.
The second-quarter results included an after-tax charge of $3 million this year, and $170 million in the second quarter of 2003. Sales in the quarter rose to $4.87 billion, up $257 million from a year ago.
Analysts on average had expected Visteon to report second-quarter earnings of 25 cents per share, according to Reuters Estimates.
Sales to non-Ford customers rose to $1.37 billion, up 35 percent from the same period a year ago. Non-Ford sales represented 28 percent of total sales in the second quarter.
Non-Ford revenue is expected to increase more than $1 billion this year from year-ago levels, Palmer said.
Visteon's stock fell 32 cents, to $10.25, on the New York Stock Exchange in afternoon trading, but was up from the day's low of $10.