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TRW Third Quarter Sales, Profits Up Slightly

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TRW photo via PR Newswire

TRW photo via PR Newswire

(credit: istock) Technology Report
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LIVONIA — Livonia-based TRW Automotive Holdings Corp. (NYSE: TRW), a provider of automotive safety systems, reported net income of $163 million or $1.28 a share, up from $158 million or $1.22 a share in the same quarter a year earlier.

Revenue was $3.97 billion, up from $3.92 billion a year earlier.

Excluding special items from the company’s current and prior year quarterly results, the company reported third quarter 2012 net earnings of $157 million, or $1.24 a share, which compares to net earnings of $177 million or $1.37 a share in the prior year period.  A higher effective tax rate in the current period was the reason for the decline in diluted earnings per share between the two periods.

“TRW’s consistent ability to achieve solid operating results, as evidenced by our third quarter results reported today, combined with our previous announcement of a share repurchase program, demonstrate the company’s commitment to delivering long-term value to our shareholders,” said John C. Plant, Chairman and CEO.  “TRW’s flexible capital structure and confidence in our ability to deliver positive earnings and cash flow will enable TRW to continue to make necessary investments in our business to support future growth while further improving returns to our shareholders.”

For the nine months, net income was $589 million or $4.58 a share, down from $732 million or $5.57 a share a year earlier. Revenue was $12.41 billion, up from $12.26 billion a year earlier

The increase in sales resulted from a higher level of demand for TRW’s broad array of active and passive safety products, improved vehicle production volumes in North America and a higher level of module sales globally, partially offset by lower vehicle production volumes in Europe and the negative impact of currency movements between the two periods.

Cash flow for the third quarter was $156 million, down from $160 million a year earlier. Cash flow was $245 million for the nine months, down from $512 million a year earlier. The lower level of free cash flow compared with last year resulted primarily from increased payments pertaining to benefit plans, higher cash taxes and lower overall earnings.

TRW expects full year industry production volumes to total 15.2 million units in North America and 18.7 million units in Europe. Within the forecast for North America, the company expects production for the Detroit Three manufacturers will be up approximately 7 percent compared with their 2011 production levels. The company continues to expect increased vehicle production volumes in China and the rest of world regions. Based on these production levels and the company’s expectations for foreign currency exchange rates, full year 2012 sales are now expected to range between $16.2 billion and $16.3 billion.

In addition, due to the difficult economic and industry environment in Europe, the company is assessing its cost base and expects to implement various actions to mitigate the challenges in the region. Although the timing and scope of the plans are under review, the company expects its fourth quarter results will include restructuring charges to range between $65 million and $75 million, primarily concentrated in Europe.

“Despite Europe’s difficult economic environment and the resulting decline in vehicle production schedules, increased demand for TRW’s innovative products combined with the company’s operating performance achieved through September will support a strong year for TRW,” Plant said.  “We remain focused on a good conclusion to the year and the execution of our growth strategy to ensure TRW is well positioned for 2013 and beyond.”

To listen to a replay of a conference call discussing the results, call (855) 859-2056, in the United States, and locations outside the U.S. should dial (404) 537-3406. The replay code is 31968514. A live audio webcast and replay of the conference call will also be available on the Company’s website at www.trw.com.

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