Visteon 1998 Earnings Increase 37 Percent to Record $712 Million
21 January 1999
Visteon 1998 Earnings Increase 37 Percent to Record $712 Million
DEARBORN, Mich., Jan. 21 -- Visteon Automotive Systems is
reporting a second straight year of strong financial performance as net income
was $712 million, up 37 percent from 1997. Revenue for the year was $17.8
billion, up 3 percent from 1997, with after-tax return on sales of 4.0
percent, up a point.
"Our 1998 financial results clearly demonstrate Visteon's ability to
deliver on our commitments," said Craig Muhlhauser, president, Visteon
Automotive Systems. "We've met or beaten every goal we set for ourselves in
1998 including improving our returns, maintaining positive cash flow, and
exceeding our target of $1.5 billion in new business. We're proud of these
results and I congratulate the entire Visteon team."
For the fourth quarter of 1998, net income was $132 million versus $48
million earned in the same period a year ago. Fourth-quarter 1998 revenue was
$4.6 million with after-tax return on sales for the quarter at 2.8 percent.
"Visteon is dedicated to the success of its customers and growing its
business profitably as we move into 1999," said Muhlhauser. "Our commitment
is to continue to improve our earnings and obtain new business of $2 billion."
Muhlhauser listed several significant milestones for Visteon in 1998
including:
* Obtaining new business contracts of $2.3 billion with 46% of that
business representing non-Ford customers and 34% of it outside of North
America. This compared favorably with Visteon's 1998 mix of 9% non-Ford and
19% non-North American business and indicates that Visteon's leadership team
is moving the business towards its target of 20 percent non-Ford business.
* Introducing several significant products and technologies such as:
Visteon's world-class voice activation system which debuts on the Jaguar
S-type vehicle this year; ICES (Information, Communication, Entertainment,
Safety, and Security) in-car computing system which provides drivers with the
ability to take the down time out of drive time; and Visteon's new super-
integrated design approach which creates products like the super-integrated
cockpit -- engineered across systems to reduce weight, complexity and cost,
and increase reliability and space efficiency while providing more technology
for consumers.
* Acquiring new businesses and developing partnerships to enhance
Visteon's capabilities including: two plants located in Poland with brake-,
chassis-, and cooling-system component production capabilities; PABA, Inc., a
producer of climate control products for the aftermarket; Zexel Innovations,
now Visteon Technologies, a provider of world-class navigation systems; and a
50:50 partnership with Pi Technologies which will serve to strengthen
Visteon's electronics and software engineering capabilities in powertrain
control systems.
* And getting closer to its customers with a dozen new facilities in
Brazil, England, France, Germany, Japan, Mexico, Portugal, and the U.S.
Visteon has 82,000 employees working at more than 120 manufacturing,
engineering, sales and technical centers located in 21 countries. Visteon's
corporate headquarters is located in Dearborn, Michigan.
Consolidated Statement of Income
Fourth Quarter Full Year
1998 1997 1998 1997
(Mils.) (Mils.) (Mils.) (Mils.)
Revenue $4,562 $4,410 $17,762 $17,220
Cost and expenses
Cost of goods sold 4,202 4,103 15,956 15,784
Selling, administrative,
and other expenses 147 186 659 575
Total costs and
expenses $4,349 $4,289 $16,615 $16,359
Operating income $213 $121 $1,147 $861
Interest
Interest income 23 5 58 17
Interest expense 31 22 102 82
Net interest expense $(8) $(17) $(44) $(65)
Equity in net income of
affiliated companies 5 (6) 26 29
Income before taxes $210 $98 $1,129 $825
Provision for income taxes 81 52 420 308
Income before minority
interests $129 $46 $709 $517
Minority interests in net
income of subsidiaries (3) (2) (3) (1)
Net income $132 $48 $712 $518
Memo: After-tax return on sales 2.8% 1.0% 4.0% 3.0%