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UPDATE 2-Parts maker Visteon raises forecast as auto sales improve

Thursday, 7 Nov 2013 | 10:56 AM ET

* Raises full-year EBITDA forecast to $680 mln-$700 mln

* 3rd-quarter net income nearly triples to $43 mln

* Revenue rises 6.8 pct

Nov 7 (Reuters) - Auto parts maker Visteon Corp raised its full-year earnings forecast after third-quarter profit nearly tripled due to cost cutting and higher sales of climate control systems.

Visteon and peers BorgWarner Inc and Lear Corp are benefiting from strong vehicles sales in the United States. Auto makers are also expected to report some of their highest sales since 2006 in the coming year.

Visteon, formerly a unit of Ford Motor Co, raised its full-year forecast for adjusted EBITDA to $680 million-$700 million from $660 million-$690 million.

"Our revised guidance primarily reflects an improved outlook for our climate electronics business," Chief Financial Officer Jeffrey Stafeil said on a post-earnings conference call.

The company's climate and electronics businesses accounted for 80 percent of its total sales in 2012.

The climate business comprises heating, ventilation, air conditioning and powertrain cooling systems, while the electronics business include infotainment and driver information systems.

However, Visteon's shares fell 2 percent to $75.25 in early trading as its earnings barely beat analysts' estimates. The company handily beat estimates in the three previous quarters.

"Given the track record of significantly beating in recent quarters on execution related margin upside, we think these results are likely softer than most investors' expectations," JP Morgan analyst Ryan Brinkman wrote in a note to clients.

Visteon's shares had gained 54 percent in the past 12 months to Wednesday's close, outperforming the S&P 500 index.

TRIMMING COSTS

Visteon said in December it would close plants around the world to cut costs.

The company's gross margins rose 11 percent to $143 million in the quarter ended Sept. 30. Selling, general and administrative expenses fell 2 percent.

Hyundai-Kia, Visteon's largest customer, accounted for about 34 percent of the company's overall third-quarter revenue, which rose 6.8 percent to $1.73 billion. Ford made up about 28 percent.

Net income attributable to the company nearly tripled to $43 million, or 85 cents per share.

The company reported adjusted earnings of $1.17 per share. Analysts on average had expected earnings of $1.16 per share, according to Thomson Reuters I/B/E/S.