Automotive technology company Visteon (NYSE: VC) reported revenue ahead of Wall Street’s expectations in Q4 CY2025, but sales were flat year on year at $948 million. On the other hand, the company’s full-year revenue guidance of $3.73 billion at the midpoint came in 3.7% below analysts’ estimates. Its non-GAAP profit of $1.77 per share was 15.6% below analysts’ consensus estimates.

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"2025 was another year of disciplined execution and strategic progress for Visteon," said President and CEO Sachin Lawande.

Company Overview

Originally spun off from Ford Motor Company in 2000, Visteon (NYSE: VC) designs and manufactures cockpit electronics for vehicles, including digital instrument clusters, displays, infotainment systems, and battery management systems.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Visteon grew its sales at a decent 8.1% compounded annual growth rate. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Visteon’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 2.4% over the last two years. Visteon isn’t alone in its struggles as the Automobile Manufacturing industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time.

This quarter, Visteon’s $948 million of revenue was flat year on year but beat Wall Street’s estimates by 2.8%.

Looking ahead, sell-side analysts expect revenue to grow 2.9% over the next 12 months. While this projection indicates its newer products and services will fuel better top-line performance, it is still below the sector average. At least the company is tracking well in other measures of financial health.

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Operating Margin

Visteon was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.2% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

On the plus side, Visteon’s operating margin rose by 6.3 percentage points over the last five years, as its sales growth gave it immense operating leverage. We’ll take Visteon’s improvement as many Automobile Manufacturing companies saw their margins fall (along with revenue, as mentioned above) because the cycle turned in the wrong direction.

In Q4, Visteon generated an operating margin profit margin of 7.2%, down 1.1 percentage points year on year. Since Visteon’s gross margin decreased more than its operating margin, we can assume its recent inefficiencies were driven more by weaker leverage on its cost of sales rather than increased marketing, R&D, and administrative overhead expenses.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Visteon’s EPS grew at an astounding 57.1% compounded annual growth rate over the last five years, higher than its 8.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into Visteon’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Visteon’s operating margin declined this quarter but expanded by 6.3 percentage points over the last five years. Its share count also shrank by 1.8%, and these factors together are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Visteon, its two-year annual EPS declines of 30% mark a reversal from its (seemingly) healthy five-year trend. We hope Visteon can return to earnings growth in the future.

In Q4, Visteon reported adjusted EPS of $1.77, down from $4.44 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects Visteon’s full-year EPS of $8.71 to grow 11.6%.

Key Takeaways from Visteon’s Q4 Results

We enjoyed seeing Visteon beat analysts’ revenue expectations this quarter. On the other hand, its full-year revenue guidance missed and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 6.5% to $99.26 immediately after reporting.

Visteon underperformed this quarter, but does that create an opportunity to invest right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).