Thanks to its outstanding quarterly results, earnings estimates
have been on the uptrend and the company has maintained its Zacks
rank #1 (Strong Buy) since March this year.
About the Company
Visteon Corporation (
is a leading global automotive supplier of climate, electronics and
interiors products for vehicle manufacturers. It serves original
equipment vehicle manufacturers with its technical, manufacturing,
sales and service facilities located in 29 countries.
The company has been transforming from a US centric company with
only one major customer to a predominantly Asia-based,
multi-customer global enterprise.
Excellent First Quarter Results
The company reported its first quarter results on May 9, 2013.
Adjusted earnings came in at $2.02 per share, significantly ahead
of the Zacks consensus estimate of $1.15 per share.
Results benefitted from increased vehicle production and new
business in Asia and North America, partially offset
by lower production volumes in Europe.
Hyundai-Kia accounted for approximately 33% of the
sales, while Ford accounted for another 28%. On a regional
basis, Asia accounted for 46% of total sales,
while Europe and Americas represented 30% and 24%
Visteon updated its full-year guidance for adjusted
earnings, to a range of $4.04 to $5.52 per share. The
company has repurchased 2.2 million shares ($125 million)
year-to-date, representing 4% of its outstanding shares.
Improved Industry Outlook
Per Zacks Auto Industry Outlook, while a strong pent-up demand
due to aging vehicles on the U.S. roads along with falling
unemployment rate have been the key factors in driving the auto
sales in the U.S., Asia promises high growth for the industry.
Asian countries, especially China and India, are expected to
account for 40% of growth in the auto industry over the next five
to seven years due to their rapidly growing economies. With its
strong presence in Asia, VC will definitely benefit from the
surging demand for automobiles in that region.
As a result of strong results and updated guidance, analysts
have increased their earnings estimates for VC. Zacks consensus
estimate for the current quarter now stands at $1.05 per share up
from $0.97 per share, 30 days ago. The estimate for the current
year is also up to $4.80 per share from $4.74 per share earlier.
The company has delivered positive earnings surprise in three
out of last four quarters, with an average surprise of 22%. Visteon
will announce its second quarter results on August 8, 2013.
The Bottom Line
VC is a Zacks Rank#1 (Strong Buy) stock. It also has a Zacks
recommendation of Outperform". Further Zacks Industry Rank of
60 out of 265 also indicates chance of outperformance in the near-
to mid- term.
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