Visteon, CommScope, Dean Foods, General Motors up with earnings; Univision rise continues

By Sara Rosenberg

New York, April 30 - Visteon Corp., CommScope Inc., Dean Foods Co. and General Motors Corp. all saw term loan levels grind higher on Wednesday on the heels of first-quarter numbers being announced, and Univision Communications Inc.'s strip of institutional bank continued to trade higher on lawsuit settlement hopes.

Visteon's term loan really popped during market hours as investors were pleased with the company's first-quarter results, according to a trader.

The term loan was quoted at 87½ bid, 88 offered, up from 85½ bid, 86½ offered, the trader said.

For the quarter, the company posted a net loss of $105 million, or $0.81 per share, on total sales of $2.86 billion, compared to a net loss of $153 million, or $1.19 per share, on total sales from continuing operations of $2.89 billion in the first quarter of 2007.

EBIT-R for the quarter was $51 million, an improvement of $97 million over first-quarter 2007.

And, operating loss was $15 million, an improvement of $67 million from the same period in 2007, reflecting improved gross margin and lower SG&A spending.

"Our first-quarter results demonstrate the benefit of Visteon's increased diversification of customer and geographic sales as well as significant operating improvement in our business," said Michael F. Johnston, chairman and chief executive officer, in a news release. "We expanded our margins and remain focused on additional cost reduction through the implementation of our restructuring plan and our overhead cost reduction initiative."

For full-year 2008, product sales are currently expected to be in the range of $10 billion to $10.2 billion, primarily due to a weaker dollar and the timing of divestitures.

Visteon also affirmed that it expects EBIT-R for full-year 2008 to be in the range of negative $25 million to positive $25 million and free cash flow for full-year 2008 to be in the range of negative $350 million to negative $250 million.

"The progress Visteon is making, combined with the additional actions we will execute in 2008, lays the foundation for Visteon to be free cash flow positive in 2009," Johnston added in the release. "With $1.6 billion of cash at March 31, 2008, and additional available liquidity, we have the flexibility to execute our plans."

Visteon is a Van Buren Township, Mich.-based automotive supplier that designs, engineers and manufactures climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers.

CommScope trades higher

CommScope's term loan B was also better on Wednesday on the back of the company's release of positive earnings results that beat analyst estimates, according to a trader.

The term loan B was quoted at 95½ bid, 96 offered, up a half a point on the day, the trader said.

Late in the day Tuesday, CommScope announced that revenues in the first quarter more than doubled to $1 billion, reflecting the acquisition of Andrew Corp., net loss was $11 million, or $0.16 per share, and adjusted operating income was $112 million, excluding special items.

The reported net income includes after-tax charges of about $34.3 million for inventory-related purchase accounting adjustments, $18.5 million for the amortization of purchased intangibles, $2.8 million of cost related to debt reduction and $2.1 million for acquisition and restructuring costs.

Excluding the after-tax charges, adjusted first-quarter earnings were $46.7 million, or $0.59 per diluted share. For the first quarter of 2007, CommScope reported net income of $45.9 million, or $0.63 per diluted share.

During the quarter, the company reduced debt by $291 million, which represented more than 10% of its total debt outstanding.

"We are proud to deliver another excellent quarter as we have successfully begun the integration of CommScope and Andrew Corp.," said Frank Drendel, chairman and chief executive officer, in a news release. "Cost synergies are ahead of schedule and our global wireless business performed very well, particularly in North America and in the Asia Pacific region. We believe that our geographic diversity combined with the breadth of our industry-leading product portfolio helped us deliver strong results in the first quarter despite an uncertain North American economic environment."

Also on Tuesday, the company provided guidance for the second quarter and reiterated its calendar year 2008 guidance:

For the second quarter, CommScope expects revenue of $1.05 billion to $1.09 billion and has an adjusted operating income target of $135 million to $145 million, excluding restructuring and transition costs as well as purchase accounting adjustments related to the fair value write up of inventory and intangibles.

For the full year, the company expects revenue of $4.1 billion to $4.3 billion and has an adjusted operating income target of $525 million to $575 million, excluding restructuring and transition costs as well as purchase accounting adjustments related to the fair value write up of inventory and intangibles.

CommScope is a Hickory, N.C.-based provider of infrastructure services for communication networks.

Dean Foods gains ground

Another name that strengthened during the trading session was Dean Foods as the company also reported better-than-expected first-quarter numbers, according to a trader.

The term loan was quoted at 95½ bid, 96½ offered, up from Tuesday's levels of 95¼ bid, 96¼ offered, the trader said.

For the quarter, the company reported earnings of $0.21 per diluted share from continuing operations, compared with $0.47 per diluted share from continuing operations in the first quarter of 2007, and net income totaled $30.8 million, compared with $63.8 million in the prior year's first quarter.

On an adjusted basis, diluted earnings per share were $0.23, compared to $0.50 in the prior year's first quarter, and adjusted net income from continuing operations for the first quarter was $32.4 million, compared to adjusted net income of $67 million last year.

The decrease in adjusted net income and earnings per share is related to the increase in interest expense as a result of the special cash dividend of $15 per share that was paid in April 2007 and lower operating results in the quarter.

Net sales for the first quarter totaled $3.1 billion, an increase of 17% from net sales in the first quarter of 2007.

Consolidated operating income in the quarter totaled $136.1 million, a decrease of 12% from $154.2 million in the first quarter of 2007, and adjusted first quarter consolidated operating income totaled $138.3 million, a decrease of 14% from $159.9 million last year.

In the quarter, debt outstanding decreased by $460 million. Total debt at March 31, net of $41 million in cash on hand, was about $4.8 billion. The company's funded debt to EBITDA ratio declined to 5.56 times as of the end of the quarter.

"On the heels of the most challenging year in our history, I am pleased with the progress we've made in the first quarter of this new year across our business," said Gregg Engles, chairman and chief executive officer, in a news release. "While we expect continued challenges in the balance of 2008, we believe the difficulties of last year have strengthened our ability to navigate the continued volatility we anticipate in the commodity markets going forward."

"For the second quarter, the conventional commodity markets remain volatile," said Jack Callahan, chief financial officer, in the release. "Furthermore, the organic milk market is shifting rapidly from a state of oversupply to one of undersupply. Given the current instability in these markets, balanced against the momentum in the business coming off of a strong first quarter, we currently expect adjusted earnings per share for the second quarter in a range of $0.26 to $0.31 per share.

"For the full year 2008, we have relatively greater confidence today compared to the start of the year. However, we believe it is too early to reassess our full year guidance given the dynamic volatility in the commodity markets. Therefore, we are maintaining our full year outlook for adjusted earnings per share of at least $1.20, and we will revisit this guidance in conjunction with our second quarter earnings report," Callahan added in the release.

Dean Foods is a Dallas-based processor and distributor of milk and other dairy products.

General Motors' bid better

Also helped by earnings was the bid on General Motors' term loan, which inched up in trading on the first-quarter news, although the offer came in a touch making it so that levels basically just tightened up, according to a trader.

The term loan was quoted at 94 bid, 94½ offered, compared to Tuesday's levels of 93¾ bid, 94¾ offered, the trader said.

For the first quarter, General Motors reported a net loss of $3.3 billion, or $5.74 per share, compared with a net loss from continuing operations of $42 million, or $0.07 per diluted share, in the year-ago quarter.

Excluding special items, General Motors posted an adjusted net loss of $350 million, or $0.62 per diluted share in the first quarter, reflecting losses at GMAC and tax expenses. These results compare to an adjusted net loss from continuing operations of $10 million, or $0.01 per diluted share in the first quarter of 2007.

Adjusted automotive earnings before taxes were $392 million, up $161 million despite the significant impact of the American Axle strike and weak U.S. auto industry. These positive results were driven by strong combined earnings before taxes of $1 billion in GM Latin America, Africa and Middle East, GM Asia Pacific and GM Europe, which more than offset a loss at GM North America.

Total revenue was $42.7 billion, down slightly from $43.4 billion in the year-ago quarter primarily due to lower North America automotive and financial services and insurance revenues.

First-quarter results include unfavorable special items totaling $2.9 billion, including $1.45 billion to record a non-cash partial impairment of the company's equity investment in GMAC. General Motors also took a non-cash charge of $731 million to increase its liability for estimated net costs associated with its support of Delphi Corp.'s bankruptcy and restructuring efforts.

General Motors' cash, marketable securities and readily available assets of the Voluntary Employees' Beneficiary Association trust totaled $23.9 billion on March 31, down from $24.7 billion on the same date last year. The change in liquidity reflects adjusted negative operating cash flow of $3.6 billion in the first quarter.

Looking ahead, in light of the current state of the U.S. economy and automotive industry, the company revised its 2008 U.S. total industry seasonally adjusted annual rate outlook to the mid to high 15 million unit range, down from the low 16 million unit range.

"We remain focused on taking the actions necessary to assure GM's long-term success - product excellence, leadership in advanced propulsion technology, growth in emerging markets, and accelerating the restructuring of our U.S. business to achieve sustainable profitability," said Rick Wagoner, chairman and chief executive officer, in a news release.

General Motors is a Detroit-based automaker.

Univison rally progresses

The run up that began in Univision's strip of institutional bank debt on Tuesday continued into the Wednesday session, although trading activity was noticeably lighter, according to a trader.

The bank debt was quoted at 84 bid, 85 offered, up from Tuesday's levels of 83½ bid, 84½ offered, and from Monday's levels of 81 bid, 82 offered, the trader said.

The rally began Tuesday after news hit that the trial regarding the Grupo Televisa SA litigation was postponed to July 1 from April 29, creating an assumption that there's some sort of settlement in the works.

The legal battle between Univision and Televisa first began in June 2005 and focuses on breach of contract issues and royalties.

Under the lawsuit, Televisa is seeking a declaration that Univision breached certain contracts and therefore, Televisa has the right to suspend or terminate those contracts without liability to Univision.

Televisa is also fighting for the right to transmit or permit others to transmit any television programming into the United States from Mexico over or by means of the internet.

Univision is a Los Angeles-based Spanish-language media company.

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