Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
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.
Don't lose track of Visteon.
- Add Visteon to My Watchlist.
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.
More from The Motley Fool
GM Proved Doubters Wrong in 2017 With a Strong Crossover Lineup
GM surprised the market when it announced strong guidance thanks to a revamped line of crossovers and SUVs. Better still, it delivered on the promises.
Ford's Behind-the-Scenes Focus on Data
Ford’s recent partnerships and small-scale tests could bode well for the future.
Ford's Tumultuous 2017
Ford’s stock languished behind GM throughout 2017. Will 2018 be a turnaround year?