Livonia-based TRW Automotive Holdings Corp. (NYSE: TRW) reported third quarter net income of $199 million or $1.54 a share, up from $56 million or 50 cents a share in the same quarter of 2009.
Revenue was $3.43 billion, up 10 percent from $3.11 billion a year earlier.
TRW said its current and prior year quarterly results both contain one-time items — favorable net tax items in the current year and restructuring charges in the prior year. Excluding those items third quarter earnings were $189 million or $1.47 a share, up from $76 million or 68 cents a share the year before.
For the nine months, net income was $630 million, or $4.93 a share, vs. a loss of $86 million or 82 cents a share in the prior year period. Revenue was $10.67 billion, up 30 percent from $8.23 billion in the first nine months of 2009.
The 2010 period included restructuring and fixed asset impairment charges of $10 million, compared to restructuring and fixed asset impairment charges totaling $74 million, as well as a trademark impairment charge of $30 million, for the 2009 period. Excluding special items, TRW reported 2010 year-to-date net earnings of $619 million, or $4.84 a share, vs. a loss of $31 million or 30 cents a share in the 2009 period.
TRW said the increase in sales was the result of significantly improved global vehicle production volumes between the two periods.
“TRW’s performance continues to be led by strong revenue growth combined with a low cost structure,” said John C. Plant, President and Chief Executive Officer. “The outstanding business performance achieved through the first nine months of this year, combined with our leading technology portfolio, the overall industry recovery and our successful growth in the emerging markets, gives us confidence as we look to the future.”
Third quarter 2010 net cash flow provided by operating activities was $267 million, which compares to $174 million in the prior year. The favorable outcome compared with last year resulted primarily from the higher level of profitability in the current quarter partially offset by higher working capital requirements. Capital expenditures were $61 million in the current quarter compared to $49 million last year. Third quarter free cash flow (cash flow from operating activities less capital expenditures) was $206 million, which compares to $125 million in the prior year quarter.
For the nine month period ended Oct. 1, net cash flow provided by operating activities totaled $690 million, which compares to a net cash usage of $57 million in the prior year period. The year-to-year improvement resulted primarily from higher operating income. Year-to-date 2010 capital expenditures were $168 million compared to $121 million in the 2009 period. Free cash flow was a positive $522 million in the first nine months of 2010 compared to an outflow of $178 million for the same period last year.
As of Oct. 1, TRW had $2.12 billion of debt and $1.09 billion of cash and marketable securities, resulting in net debt (defined as debt less cash and marketable securities) of $1.03 billion. This net debt outcome reached a new historic low for the company, $553 million lower than the balance at the end of 2009 and $1.04 billion lower than the balance at the end of the prior year third quarter.
TRW expects full year light vehicle production to total 11.8 million units in North America and 18.0 million units in Europe. Based on these production levels and the company’s expectations for foreign currency exchange rates, full-year sales are expected to be approximately $14.1 billion (including fourth quarter sales of approximately $3.4 billion).
To listen to a replay of a conference call discussing the results, visit www.trw.com or call (800) 642-1687 in the United States and (706) 645-9291 elsewhere, using the pass code 15650515.
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