* 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 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
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
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
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
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)