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What: Shares of automotive supplier Visteon Corp. (NYSE:VC) shot up 9% today, on news that it would be implementing cost-cutting measures in an attempt to reinvigorate profits.
So what: It was an ugly quarter for Visteon. Revenue fell 15%, to $1.62 billion, slightly below estimates, while adjusted profits per share were down 53% to $0.37, well below analyst projections of $0.48. Sales were affected in part by negative currency translation rates, but the company did slightly raise its revenue outlook, to $6.8 billion. It also plans to sell its climate control business, and divest its interiors unit and its stake with a Chinese automotive company.
Now what: Visteon also plans to close plants around the world, including in Europe and the Philippines, and investors seem to think this will help unlock value and boost profitability for the former Ford division. With a P/S ratio of 0.31, this could be a value play, but I'd like to see some evidence that management's new initiatives are helping to turn things around.
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Jeremy Bowman has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.