Editor's note: A previous version of this story misstated the timing of Visteon's estimated sales impact from the coronavirus outbreak.
Auto supplier Visteon Corp. on Thursday reported a 19 percent drop in fourth-quarter net income and a 1.8 percent bump in sales as the company battled lower industry production, vehicle launch delays at Ford and a strike at GM while new business rolled in.
Net income for the supplier of cockpit and instrument systems fell to $35 million in the fourth quarter, compared with $43 million in the fourth quarter of 2018, on sales of $744 million. Adjusted earnings before interest, taxes, depreciation and amortization increased 15 percent to $85 million. The company said product launches and updates helped offset lower overall industry volume.
For the full year, net income fell 57 percent to $70 million while sales slipped 1.3 percent to $2.95 billion due to lower vehicle production, negative currency exchange and customer pricing, Visteon said.
Global vehicle manufacturers in 2019 awarded Visteon new business of $6.1 billion, down from $6.9 billion in 2018. New business was "driven by digital clusters, multi-display modules, Android-based infotainment systems, cockpit domain controllers and battery management systems," the supplier said in its quarterly release.
"Despite lower vehicle production volumes, Visteon finished the year strong with 7 percent growth-over-market in the fourth quarter, driven by our next-generation digital cockpit solutions," CEO Sachin Lawande said in a statement. "In 2020, we are anticipating another challenging year for the automotive industry, as we expect global vehicle production volumes to further decline by approximately 3 percent. However, we expect Visteon sales to continue to grow above market and increase year-over-year as we lead the digital cockpit transformation."
The quarterly results missed Wall Street expectations, with analysts anticipating a growth-over-market rate in the quarter of 10 percent to 11 percent, David Leiker, senior research analyst for Robert W. Baird & Co. Inc., said in an analyst note.
Shares of Visteon fell 7.7 percent to close at $79.14 on Thursday.
For 2020 the company said it expects sales of $3 billion to $3.1 billion, adjusted EBITDA of $250 million to $270 million and adjusted free cash flow of $40 million to $60 million.
The full-year outlook doesn't include impact from the coronavirus outbreak in China. Visteon estimated the virus outbreak, which has killed at least 2,126 globally, would impact revenue by about $60 million in the first quarter.
Crain's Detroit Business contributed to this report.
