WRAPUP 2-Auto supplier Tower beats, Visteon ups outlook

Thu May 5, 2011 1:15pm EDT

* Tower adjusted profit 57 cents/shr outpaces estimates

* Tower shares shoot up more than 5 pct in trading

* Visteon shares edge up after company raises outlook (Adds share move, analyst comment, executive comments, background on U.S. supplier industry)

By Deepa Seetharaman and Nick Carey

DETROIT, May 5 (Reuters) - Auto parts supplier Tower International (TOWR.N) reported first-quarter results that blew past estimates on Thursday, while Visteon Corp (VC.N) lifted its full-year forecast even though first-quarter profit fell short of estimates.

Tower reported a profit, excluding one-time items, of 57 cents per share, higher than the average Wall Street estimate of 14 cents per share, according to Thomson Reuters I/B/E/S.

Higher-than-expected revenue and new business helped Tower surpass Wall Street estimates, analysts said on Thursday.

Visteon boosted its full-year earnings and revenue outlooks helped in part by a strengthening euro and increased global production volumes.

Visteon raised its full-year revenue outlook to between $7.75 billion and $7.85 billion and said it expected earnings before interest, taxes, depreciation and amortization of $640 million to $680 million.

Previously, the company had said it expected revenue for the year of $7.3 billion to $7.5 billion and EBITDA in a range of $620 million to $660 million.

Tower shares were up 5.1 percent at $16.65 and Visteon stock was about about 1 percent at $67.15 on Thursday afternoon.

The quarterly reports come as the U.S. auto industry recovers from a slump that sent major automakers Chrysler Group LLC and General Motors Co (GM.N) as well as a number of parts suppliers, including Tower and Visteon, into bankruptcy.

"These actions, along with actions to exit unprofitable or low-margin supply contracts, have the company extremely well positioned for margin expansion as end markets recover," Baird analyst David Leiker said in a research note.

Leiker added that over the next four years, Baird expected Tower's operating margin to expand by more than 2.5 percentage points as volume rebounds due to a well-designed manufacturing footprint and tighter cost controls.

Supply disruptions stemming from the earthquake in Japan have forced the global auto industry to curtail production and hunt for alternative sources of parts.

Some North American suppliers will be able to pick up business, but top-tier suppliers are also hurt by the inability to buy components made in Japan used in their products.

During a conference call, Visteon Chief Executive Don Stebbins said the company was monitoring 100 Japanese suppliers. The company lost sales of about $11 million in the first quarter and lost $3 million in profit.

"Uncertainty remains, our outlook assumes additional impacts during the course of the year, principally in our electronics business, due to anticipated chip and related component shortages," Chief Financial Officer Bill Quigley said during a call with analysts.

Visteon, which makes air conditioning and electronics systems, was spun off from Ford in 2000 and filed for Chapter 11 bankruptcy in May 2009. It emerged from bankruptcy in October 2010.

Tower, which makes stamped metal parts for automakers, emerged from bankruptcy in 2007, when most of its assets were sold to a unit of private equity firm Cerberus Capital Management [CBS.UL].

Van Buren Township, Michigan-based Visteon reported first-quarter earnings of $39 million, or 75 cents per share, compared with $233 million or $1.79 per share, a year earlier.

Analysts had expected earnings per share for the quarter of 79 cents. Visteon's net profit in the first quarter of 2010 had been boosted by a one-time net gain of $237 million.

Revenue at the company rose in the quarter to $1.97 billion from $1.85 billion.

Tower, based in Livonia, Michigan, reported a quarterly net profit of $9 million, or 45 cents per share, compared with a loss of $8.7 million, or 70 cents per share a year earlier

Revenue in the quarter rose 25 percent to $599 million from $479 million. Tower returned as a publicly traded company with an initial public offering last October. (Reporting by Nick Carey and Deepa Seetharaman, editing by Dave Zimmerman and Matthew Lewis)

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