LIVONIA, Mich. – TRW Automotive Holdings Corp. reported second quarter 2012 financial results with sales of $4.2 billion, about equal compared to the prior year period (up more than 8 percent excluding the impact of currency movements and divestitures).
"Supported by a strong market position and increasing demand for the company’s innovative safety technologies, TRW continued to move forward in the second quarter despite a notable decline in European vehicle production," said John Plant, chairman and CEO. "TRW’s solid performance through the first half of 2012 provides a firm foundation for TRW to reach its full year goals."
The company’s second quarter 2012 operating income was $337 million, compared with $368 million in the 2011 period. The year-to-year decline in profit was primarily driven by planned increases in costs to support future growth and the negative profit impact from higher raw material prices.
The company reported first half 2012 sales of $8.4 billion, an increase of $104 million compared to prior year sales. The company said this increase in sales resulted from a higher level of demand for TRW’s broad array of active and passive safety products and improved vehicle production volumes in North America, partially offset by lower vehicle production volumes in Europe and the negative impact of currency movements between the two periods.
For the first half of 2012, the company reported operating income of $668 million, which compares to $740 million of operating income in the prior year period.
Based on revised 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 $16.4 billion, with third quarter sales expected to be approximately $3.9 billion.
"TRW remains cautious in the near-term as our 2012 guidance provided today reflects the difficult economic environment in Europe and its negative impact on the automotive industry. Managing through these challenges while protecting the company’s profitability and implementing TRW’s extensive growth strategy is essential to ensure continued success in 2012 and beyond," said Plant.
In other news this week, TRW announced that its German subsidiary has settled its antitrust case with the U.S. Department of Justice (DOJ). TRW Deutschland Holding GmbH, has entered into a settlement with the DOJ regarding certain antitrust violations.
The subsidiary has agreed to plead guilty to one count of conspiracy in restraint of trade involving sales of occupant safety products, and once approved by the court, this settlement concludes the current investigation by the DOJ. Under the terms of the agreement, TRW Deutschland Holding GmbH will pay a fine of $5.1 million. Also, under the terms of the agreement, all but one of its employees will be protected against prosecution for the antitrust offenses. TRW reported that the DOJ has not yet determined whether the employee will face prosecution.
The related European Commission investigation into alleged competition law violations is ongoing.
"The actions connected with the DOJ settlement announced today conflict with what TRW stands for and are not consistent with our policies," said Plant. "The company’s policy is to comply with all laws and regulations, including all antitrust and competition laws. Once we learned of the investigation, we moved very quickly to cooperate with the DOJ and bring this matter to a resolution. In addition, we have put in place enhanced training and communications to ensure that everyone in the organization is clear that we do not tolerate such conduct."
