TRW Automotive 1Q net income jumps 38 percent

LIVONIA (AP) -- TRW Automotive Holdings Corp., which makes brake, steering and safety systems, reported better-than-expected earnings for the first quarter Wednesday as global auto sales grew and demand for its safety products increased.

TRW also raised its full year revenue guidance. Its shares rose $3, or 5.4 percent, to $58.50 in premarket trading Wednesday.

The Livonia company said its net income jumped 38 percent to $281 million, or $2.13 per share, compared with $204 million, or $1.61 per share, in the first quarter of 2010.

Revenue rose 15 percent to $4.1 billion.

Adjusted for a gain on a business acquisition and charges for debt retirement and ending a service contract, TRW Automotive made $2.21 per share, beating Wall Street'as expectations. Analysts polled by FactSet expected earnings of $1.78 per share on revenue of $3.96 billion.

CEO and Chairman John Plant said in a statement that the company is taking advantage of a strong market position and is profitably expanding into high-growth markets.

"We are confident TRW is positioned for long-term success given its growth prospects, consistent ability to generate substantial positive cash flow and its expanding portfolio of innovative technologies," he said.

The company reduced its net debt by $49 million since the end of 2010, cutting it to a historic low. The parts maker had $1.76 billion in debt at the end of the quarter and just over $1 billion in cash, for a net debt of $719 million, its statement said.

Despite automaker production cuts due to parts shortages caused by the earthquake in Japan, TRW raised its 2011 North American auto production forecast from 12.7 million vehicles to 13 million. In Europe, the forecast rose from 18.7 million vehicles to 19.3 million.

The company said its forecast assumes that production lost in the second quarter will be made up in the second half of the year.

"Vehicle production remained robust through the first quarter of 2011; however, we are cautious in the near term due to supply chain disruptions caused by the earthquake in Japan," Plant said.

TRW raised its full-year revenue guidance to a range of $15.7 billion to $16 billion. In February it expected $14.9 billion to $15.3 billion. Second-quarter sales are expected to be about $3.9 billion.

Analysts were expecting full-year revenue of $15.54 billion.

Published: Thu, May 5, 2011

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