Visteon Q4 net income falls, revenue rises

Auto supplier Visteon Corp. said Thursday that fourth-quarter net income dropped nearly 50 percent as production at the company's top customers fell 2 percent, though overall revenue rose.

The company said the ongoing microchip shortage could hit global auto production by about 10-15 percent in the first half of 2021 and likely lead to additional plant closures. Visteon said it now expects industry production volumes to increase about 8 percent to 80 million units in 2021, compared with earlier expectations of 14 percent global growth.

Visteon said it expects the supply situation to improve in the second half of 2021.

For the fourth quarter Visteon reported net income of $18 million compared with $35 million in the year-ago period. Revenue rose 5.8 percent during the quarter to $787 million.

Gross margins fell to 11.3 percent in the quarter from 14 percent in the year-earlier period.

For all of 2020, Visteon swung to a net loss of $56 million from net income of $70 million in 2019. Revenue fell 13.5 percent to  $2.55 billion in 2020 as the pandemic impacted auto production.

A big contributor to the net loss was $76 million in restructuring expenses on the year, likely tied to plant operations during COVID-19-related shutdowns.

Still, the company grew its backlog of new business, reporting $1.4 billion in new business during the fourth quarter for a total of $4.6 billion in 2020. Visteon launched 11 new products in the quarter for a total 55 for the year.

Visteon expects sales to increase in 2021 and is forecasting full-year revenue in the range of $2.875 billion to $3.025 billion, the company said in the release. That's below analysts' estimates of $3.14 billion, according to Refinitiv IBES data

Shares of Visteon fell 10 percent to close at $122.74 on Thursday in New York.

"In 2021, we anticipate sales will increase approximately 16 percent year-over-year, driven by the rebound in industry production volumes and continued growth over market due to new product launches," CEO Sachin Lawande said in a statement. "Visteon is on schedule to launch more than 50 new products this year, which are projected to generate more than $7 billion ... in lifetime revenue, and positions us well to achieve our 2023 targets."

Reuters contributed to this report.