From AFX News Limited
DETROIT -- Struggling auto supplier Visteon Corp. predicts a net loss of $244 million for last year and a loss of $267 million to $367 million this year, but the company expects to return to sustained profitability in 2009 or beyond.
In a presentation Thursday to the Society of Automotive Analysts of New York conference in Dearborn, MI, Visteon said it would face headwinds this year from lower sales volumes of its customers, as well as continued restructuring costs.
But executives said the company has positioned itself for positive cash flow in 2009 by pulling in new business, jettisoning unprofitable plants, mainly in North America, and moving production to lower-cost regions, such as Asia.
"We are continuing to forecast softness in many of our customers' production," said Jim Palmer, executive vice president and chief financial officer.
Van Buren Township, MI-based Visteon stressed that the predicted loss for 2006 was preliminary and could change.
Company officials said that Visteon has been successful in weaning itself from Ford Motor Co., its former owner, increasing its business with other auto manufacturers such as Hyundai Motor Co. and Kia Motors Corp.
But of Visteon's major customers, including Ford, Nissan Motor Co. and Renault SA, only Hyundai and Kia will increase their business with Visteon this year, the company said.
Uncertainties include upcoming labor negotiations between Detroit's Big Three and the United Auto Workers union and the potential for a strike, as well as increased raw materials costs, company officials said.
"We're going to continue to address the underperforming and non-core parts of our business," Chief Executive Michael Johnston told the analysts.
For the first nine months of last year, Visteon lost $124 million, or 97 cents per share, versus a loss of $1.61 billion, or $12.78 a share, in the same period the previous year.
Production cuts from the Big Three domestic automakers and other companies have wreaked havoc on the auto supply industry, affecting Visteon and other parts makers. Several are operating under bankruptcy protection.
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