Visteon Posts Sales Slide, Plans Cuts

The auto-parts supplier will cut 900 jobs.
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Visteon

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reported a narrowed third-quarter loss but sharply lower sales as it grapples with production cuts from automakers.

The auto-parts supplier also said Tuesday that it plans to cut 900 jobs as part of its restructuring plan.

Visteon's loss narrowed to $177 million, or $1.38 a share, from $207 million, or $1.64 a share, a year earlier. The latest quarter included $14 million in restructuring costs; the year-ago period include $11 million in restructuring expenses.

Analysts polled by Thomson First Call projected a loss of 76 cents a share, though it's not clear if that estimate includes the restructuring charges.

Sales slid to $2.48 billion from $4.12 billion, missing Wall Street's estimate of $2.63 billion. The company said the top line was hurt by the sale of 23 facilities last year to its former parent company,

Ford Motor

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.

Visteon still derives a large portion of its revenue from sales to Ford; the company said, though, that so far this year more than half of its product sales were generated from other customers. Still, results were hurt by widespread production cuts at Ford and other major automakers.

"Our third quarter results came under pressure due, in part, to significant reductions in vehicle production by a number of our customers," said Michael F. Johnston, chairman and chief executive of Visteon. "We are taking aggressive actions to resize the business in light of these declines, and we expect conditions to continue to be challenging for the remainder of the year and into 2007."

Visteon said it plans to cut another 900 jobs, primarily in "higher cost" countries. The company will record a charge of up to $65 million in the fourth quarter.

For all of 2006, Visteon expects product sales of $10.9 billion and earnings before interest and taxes to be $40 million to $50 million. The company warned last month that would post a shortfall for the second half of the year.