Visteon reported mixed fourth-quarter financial results, with the AI and autonomous driving technology developer missing on earnings while topping revenue views. Fellow auto stock Allison Transmission topped fourth-quarter earnings and revenue estimates late Wednesday. The auto stock also gave an optimistic 2023 outlook, with global growth expectations. Auto stocks VC and ALSN soared Thursday
Auto Stocks: Visteon Earnings
Estimates: Analysts predicted fourth-quarter Visteon earnings per share fell 12% to $1.49. Wall Street forecast revenue dropping 22% to $957 million. For the full year, analysts saw Visteon earnings per share soaring 161% to $5.51. The Street expected sales to grow 32% to $3.65 billion.
Earnings: Visteon reported Q4 sales increased 35% to $1.06 billion while EPS fell 22% to $1.32. For the full year, VC had sales of $3.76 billion, a 35% increase compared to 2021. Visteon full-year earnings grew 153% to $5.33 per share.
Visteon's revenue was driven by a ramp up in new product launches and customer vehicle production growth, according to the company. VC released 45 new products in 2022.
Visteon's 2022 adjusted EBITDA was $348 million, 9.3% of revenue. The company said this was driven by higher sales and modest increases in engineering and other fixed costs. VC said its positive pricing mostly offset incremental costs caused by the ongoing global semiconductor shortages and other supply chain challenges.
Outlook: Visteon's full-year 2023 guidance anticipates sales in the range of $3.95 billion-$4.15 billion, adjusted EBITDA in the range of $405 million-$445 million and adjusted free cash of $115 million-$165 million.
"Through the continued momentum of our next-generation products and relentless execution, in 2023, we anticipate that we will continue to grow sales, expand margins, and increase adjusted free cash flow generation," CEO Sachin Lawande said in a statement.
Auto Stocks: VC Share Fundamentals
Visteon stock advanced 4.4% to 166.23 Thursday during market trade. On Wednesday, VC shares fell 0.8% to 159.19 amid higher-than-average volume, but rebounded intraday from the 21-day line. VC shares are in a consolidation with a current 152.20 buy point.
Investors previously could have used 147.17 as a handle entry, but VC stock showed messy action around that area in January.
The relative strength line for auto stock Visteon has been improving for 10 months and recently hit the highest point in more than four years.
Futures Fall On Inflation; Tesla Extends Loss On FSD Recall
Specialties: AI, Self-Driving
The Michigan-based firm specializes in artificial intelligence and autonomous driving technology for automakers. Visteon provides automotive parts for myriad vehicle manufacturers, including Ford Motors and General Motors. Ford spun off Visteon in 2000. Its technology crosses a range of industries and applications, including AI, connected cars and cybersecurity.
The company has roughly 10,000 employees at more than 40 facilities in 17 countries and has new partnerships with Amazon and Qualcomm.
Meanwhile, auto stock Visteon's average earnings growth skyrocketed in the last three quarters, including a 777% increase in Q3. Additionally, Visteon sales growth has accelerated for the past four quarters, from -16% to 63%.
Visteon stock ranks No. 1 in the Auto/Truck-Original Equipment industry group. The auto stock has a 99 Composite Rating out of 99. VC stock has a 94 Relative Strength Rating. The EPS rating is 75.
Auto Stocks: Allison Transmission Earnings
Estimates: Wall Street predicted Allison Transmission earnings would rise 9% to $1.25 per share. Analysts expected revenue to advance 5% to $676 million. For full-year 2022, Allison Transmission earnings per share were expected to climb 21% to $5.27, with revenue increasing 14% to $2.73 billion.
Earnings: Allison Transmission reported Q4 sales increasing 11% to $718 million while EPS grew 32% to $1.52. Full-year revenue advanced 15% to $2.77 billion and earnings shot up 34% to $5.53 per share.
CEO David Graziosi said in a statement Wednesday that Allison Transmission had strong domestic and international demand.
The company reported a 15% sales increase in North America for its on-highway business segment. ALSN also reported a 28% sales increase in Europe, Middle East and Africa on the back of high demand for "vocational truck and wheeled defense" vehicles.
In China, Allison Transmission saw a 59% sales increase, despite a decline in production of more than 40% in the Chinese commercial truck and bus market, according to the company.
"As a result of the execution of our growth initiatives, we are guiding to another record revenue year for 2023 as we continue to increase our penetration and expand our addressable markets," Graziosi said Wednesday.
Outlook: Allison Transmission expects 2023 sales of $2.825 billion-$2.925 billion. The company predicts adjusted EBITDA in the range of $965 million-$1.025 billion. ALSN executives also see adjusted free cash flow in the range of $480 million-$530 million. The company expects increased sales in 2023 driven by price hikes on "certain products."
Auto Stocks: ALSN Stock
Allison Transmission stock surged 10% to 50.23 Thursday. On Wednesday, ALSN shares edged up 0.11% to 45.58. The auto stock cleared a 45.43 cup-base buy point on Feb. 1 and has been trading around that entry since then, according to MarketSmith.
The current buy zone extends to 47.70. On a weekly chart, the cup base looks like a large handle to a consolidation going back to May 2021.
Previously, ALSN stock cleared an early entry on Jan. 24, as it rebounded above its 50-day line, cleared a short-term high and broke a down-sloping trendline.
The relative strength line has moved sideways for the past few months but is right at two-year highs. The RS line, the blue line in the charts provided, reflects a stock's performance vs. the S&P 500 index.
Large Variety Of Markets
Indianapolis-based Allison Transmission designs and manufactures traditional and electrified vehicle propulsion solutions. Allison Transmission is also one of the largest global manufacturers of medium- and heavy-duty fully automatic transmissions for commercial and defense vehicles.
Allison Transmission products are used in a wide variety of applications, including on-highway trucks, buses, motor homes, construction and mining equipment as well as defense vehicles. The company has operations in around 150 countries with 1,400 independent distributor and dealer locations.
Last month, auto stock Allison Transmission announced it has partnered with Nikola to test its Class 8 battery-electric vehicle and hydrogen fuel cell electric vehicles.
In Q3, Allison Transmission's earnings leapt 63%, the second straight quarter of accelerating growth. Sales rose 25%, the best gain in five quarters.
Auto stock Allison Transmission ranks second in the Auto/Truck-Original Equipment industry group. ALSN shares have a 94 Composite Rating out of 99. The stock has an 84 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement. The EPS rating for the auto stock is 85.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
