Visteon Corporation (NYSE: VC) today announced second-quarter 2017 results, reporting sales of $774 million compared with $773 million in the second quarter of 2016. Second-quarter net income attributable to Visteon was $45 million or $1.41 per diluted share for 2017, compared with $26 million or $0.76 per diluted share for 2016.
Second-quarter Electronics sales were $774 million compared with $762 million for the same period in 2016. Electronics second-quarter net income was $45 million or $1.41 per diluted share for 2017, compared with $43 million or $1.25 per diluted share for 2016.
Electronics adjusted EBITDA, a non-GAAP financial measure as defined below, was $84 million for the second quarter, compared with $79 million in the same period last year. Electronics adjusted net income, a non-GAAP financial measure as defined below, was $44 million for the second quarter or $1.38 per diluted share, compared with $44 million or $1.28 per diluted share in the second quarter of 2016.
During the first half, global vehicle manufacturers awarded Visteon new business of $3.1 billion in lifetime revenue. The ongoing backlog, defined as cumulative remaining life-of-program booked sales, was approximately $17.3 billion as of June 30, 2017, up from $16.5 billion at the end of 2016.
“Our second-quarter performance was very solid, with improved year-over-year sales and adjusted EBITDA,” said Visteon President and CEO Sachin Lawande. “Sales grew 3 percent, excluding currency, despite flat global vehicle production volumes. This growth was driven by a high number of new product launches over the past several quarters, particularly in China. Adjusted EBITDA improved due to higher sales and our ongoing focus on cost reduction.”
Lawande added: “New business wins remained strong, with about 50 percent in the fast-growing segments of all-digital instrument clusters and display audio. With $3.1 billion in new business wins in the first half, we are on track to achieve our target for the full year.”
Second Quarter in Review
Visteon Corporation
Second-quarter sales were $774 million, compared with $773 million for the same period in 2016. The $1 million increase is primarily related to higher electronics production volumes and new product launches, partially offset by unfavorable currency and the exit of other operations.
Gross margin was $112 million, compared with $109 million a year earlier. The $3 million increase in gross margin reflected higher sales and the exit of other climate operations, partially offset by unfavorable currency. Selling, general and administrative expenses were $53 million for the second quarter of 2017, compared with $54 million for the second quarter of 2016.
For the second quarter of 2017, the company reported net income attributable to Visteon of $45 million or $1.41 per diluted share, compared with $26 million or $0.76 per diluted share for the same period in 2016. The $19 million increase in net income included a gain on sale of a non-consolidated affiliate of $3 million, lower restructuring expense of $4 million and the non-recurrence of 2016 loss from discontinued operations of $9 million, net of tax.
Electronics Product Group
Sales totaled $774 million and $762 million during the second quarter of 2017 and 2016, respectively, for an increase of $12 million, resulting from new product launches, particularly in China. Unfavorable currency movements and contractual customer pricing reductions partially offset the increase. On a regional basis, Asia accounted for 38 percent of sales, Europe 31 percent, North America 29 percent, and South America 2 percent.
Gross margin for the second quarter of 2017 was $112 million, compared with $109 million a year earlier. The $3 million increase reflected the impact of higher sales volume, material cost efficiencies and a decline in engineering expenses, partially offset by customer pricing and unfavorable currency.
Adjusted EBITDA for the Electronics Product Group was $84 million for the second quarter of 2017, compared with $79 million for the same quarter last year. The improvement was primarily driven by increased sales and cost efficiencies, partially offset by unfavorable currency. Selling, general and administrative expenses were $53 million for the second quarter, compared with $54 million for the same quarter in 2016. Adjusted EBITDA margins were 10.9 percent for the second quarter of 2017, a 50-basis point improvement from prior-year levels.
For the second quarter of 2017, net income was $45 million or $1.41 per diluted share, compared with net income of $43 million or $1.25 per diluted share for the same period in 2016. Second-quarter 2017 net income benefited from the sale of a non-consolidated affiliate, which more than offset restructuring transformation and related costs. Adjusted net income, which excludes these items, was $44 million or $1.38 per diluted share for the second quarter of 2017, compared with $44 million or $1.28 per diluted share for the same period in 2016.
