DETROIT -- Automotive cockpit technology supplier Visteon Corp., which counts Ford and Mazda as its largest customers, joined the emerging downward cycle in the automotive supply chain on Thursday, posting sharply lower second-quarter net income.
Visteon said net income plunged 80 percent to $7 million while revenue for the quarter fell 3 percent to $733 million. Gross profits fell 33 percent to $70 million, the company said, blaming less production by automakers along with unfavorable customer pricing, currency exchange rates and "timing of engineering expenses."
On a per-share basis, earnings were 28 cents, which fell 7 cents below the consensus Wall Street forecast, according to Zacks.
In the quarter, Europe accounted for 31 percent of sales, North and South America accounted for 27 percent, China at 24 percent and other Asia markets accounted for 18 percent.
"Despite the challenging vehicle production environment, our second-quarter sales outperformed the industry, particularly in China," CEO Sachin Lawande said in a press release. "Our pipeline of new business opportunities remains robust despite the near-term uncertainty, which reinforces our confidence in the long-term prospects of the business."
Visteon said it secured new business awards during the quarter with a value of $3.2 billion.
Ford Motor Co., originally Visteon's parent company 20 years ago, accounted for 26 percent of the supplier's business last year, according to its annual report. Mazda Motor Corp. was second with 18 percent of its business.
Despite missing estimates, the company report gained traction on Wall Street, with shares rising $6.30, or nearly 10 percent, to close at $69.84 on Thursday in New York trading.
"While the end-market headwinds are still in place (and some incremental weakening) we are very encouraged by the revenue/margin performance in Q2 and strong business backlog," Baird analyst David Leiker wrote in a research note on Thursday. "Furthermore, we have greater confidence in Visteon executing/delivering the strong new business backlog."
The company also said it repurchased 322,120 shares for $20 million with $380 million left as part of its share repurchasing program.
Visteon maintained its full-year sales guidance of between $2.9 billion and $3 billion, but lowered its earnings before interest, tax, depreciation and amortization by as much as 7 percent.
Last week, Lear Corp. lowered its full-year outlook by more than $1 billion to revenue between $19.8 billion and $20.3 billion from a previous projection of $20.9 billion to $21.7 billion. The projection also alters its year-end net income to between $885 million and $965 million from a previous outlook of $1.1 billion to $1.2 billion.
Visteon, based in suburban Detroit, ranks No. 72 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $2.98 billion in 2018.
Automotive News contributed to this report.