LIVONIA, Mich. – TRW Automotive Holdings Corp. has reported third quarter 2011 financial results, with sales of $3.9 billion, an increase of 14 percent compared to the prior year period. The company reported GAAP third quarter net earnings of $158 million or $1.22 per diluted share, which compares to net earnings of $199 million or $1.54 per diluted share in the prior year period.
The company noted that its current and prior year quarterly results both contain special items. The current year quarter included debt retirement charges while the prior year period included debt retirement charges and favorable tax benefits. Excluding these special items, the company reported net earnings of $177 million, or $1.37 per diluted share in the third quarter of this year, which compares to net earnings of $189 million or $1.47 per diluted share in the prior year period.
"TRW’s solid third quarter results and business performance achieved through the first nine months of this year provide evidence of the company’s outstanding product and geographical positions," said John Plant, chairman and CEO. "We are confident in the future given the company’s strong market position and profitable growth initiatives that are positioning TRW for long-term success."
The company reported third quarter 2011 sales of $3.9 billion, an increase of $489 million or 14 percent from the prior year period. The company said this increase in sales resulted from improved vehicle production volumes, increasing demand for TRW’s broad array of active and passive safety products and the positive impact of currency movements between the two periods.
The company’s third quarter 2011 operating income was $240 million, compared with operating income of $269 million in the 2010 period. The year-to-year decline in profit was driven by the negative profit
impact from higher raw material prices, higher legal fees and planned increases in costs to support future growth, partially offset by the improved profit from the higher level of sales between the two quarters.
Excluding special items, the company reported third quarter 2011 net earnings of $177 million, or $1.37 per diluted share, which compares to net earnings of $189 million or $1.47 per diluted share in the 2010 period. For the nine month period ended Sept. 30, 2011, the company reported sales of $12.3 billion, an increase of $1.6 billion, or 15 percent compared to prior year sales. TRW said the increase in sales resulted from the higher level of global vehicle production volumes, increasing demand for TRW’s innovative technologies and the positive impact of currency movements between the two periods.
TRW recognized a $9 million gain on an acquisition related to the purchase of a shock absorber manufacturing facility during the 2011 period. The gain reflects the excess of fair value of the business in comparison to the purchase price.
Excluding special items, the company reported 2011 year-to-date net earnings of $733 million, or $5.58 per diluted share, which compares to net earnings of $619 million or $4.84 per diluted share in the 2010 period.
Divestiture Activity
During the most recent quarter, the company took action to divest certain of its non-safety related businesses in Asia and entered into an agreement to sell its cold forming business in Japan. The planned divestitures, with annual sales of approximately $100 million, are expected to be finalized in the fourth quarter of 2011 and will enable the company to concentrate its resources on the growing safety systems market in Asia.
2011 Outlook
TRW expects full year production to total 12.9 million units in North America and 19.9 million units in Europe. Based on these production levels and the company’s expectations for foreign currency exchange rates, full year 2011 sales are now expected to be approximately $16.2 billion (including fourth quarter sales of approximately $3.9 billion).
"Although vehicle production schedules have moderated slightly in the second half of 2011 compared to the first half of the year, increased demand for TRW’s innovative products, continued growth in the developing markets of the world and the company’s business performance achieved through September will support a strong year for TRW," said Plant. "We are committed to finishing a solid year while executing our profitable growth strategy to ensure TRW is well positioned for 2012 and beyond."
