TRW Automotive Holdings Corp.
) posted a 15.8% fall in profits to $1.55 per share in the fourth
quarter of 2012 from $1.84 in the same quarter of 2011 (all
excluding special items). However, the quarterly EPS surpassed
the Zacks Consensus Estimate by 20 cents. Adjusted net income
dipped 16.4% to $199 million from $238 million in the fourth
quarter of 2011.
Revenues in the quarter inched up 1.2% to $4.0 billion, driven by
higher demand for the company's innovative technology products,
increased vehicle production volumes in North America and China
and a rise in module sales globally, partially offset by
significantly lower vehicle production in Europe and the negative
impact of currency movements.
Excluding special items, operating income in the quarter dipped
marginally by 3.9% to $295 million from $307 million in the prior
year as higher sales and lower legal expenses were more than
offset by planned increases in costs to support future growth and
the adverse impact of currency
Earnings before interest, taxes, depreciation and amortization
before special items (adjusted EBITDA) declined slightly by 2.2%
to $404 million in the quarter compared with $413 million in the
prior year quarter.
For full year 2012, TRW recorded a 17.3% fall in profits to $6.14
per share from $7.42 in 2011 (all excluding special items) while
adjusted net income ebbed 18.8% to $788 million from $971 million
a year ago. EPS in the year exceeded the Zacks Consensus Estimate
Revenues edged up 1.2% to $16.4 billion, driven by strong demand
for the company's active and passive safety products, improved
vehicle production volumes in North America and higher module
sales globally, partially offset by lower vehicle production
volumes in Europe and the negative impact of currency
Excluding special items, operating income dropped 3.6% to $1.2
billion from $1.3 billion in the prior year, as higher level of
sales was more than offset by planned increases in costs to
support future growth and the negative impact from higher raw
material prices and currency movements.
TRW had $1.5 billion of debt and $1.2 billion of cash and cash
equivalents as of Dec 31, 2012, resulting in net debt (debt less
cash and cash equivalents) of $239 million. Consequently, debt to
capitalization ratio declined to 29.0% as of Dec 31, 2012 from
34.3% as of Dec 31, 2011.
For full year 2012, net cash flow from operations was $956
million, a 14.6% decline from $1.1 billion in the prior year.
Capital expenditures rose to $623 million in the year from $571
million in 2011. Consequently, free cash flow decreased to $333
million from $549 million in 2011 due to higher capital
expenditures and increased payments pertaining to benefit plans
and higher cash taxes.
TRW anticipates sales in the range of $16.4 billion−$16.7 billion
for full year 2013, including $4.1 billion for the first quarter
of the year. The expectations were based on the assumptions for
industry production volumes of 15.8 million units in North
America and 18.3 million units in Europe. The company continues
to expect China and the rest of world regions to be the growth
drivers in the year.
TRW Automotive is a leading manufacturer of advanced technology
products and services for the automotive markets. After the
earnings announcement, the company's shares grew 0.8% to $60.32,
the highest closing price since Feb 15, 2011. Currently, the
company retains a Zacks #3 Rank on its stock, which translates
into a Hold rating for the short term (1 to 3 months).
Few stocks that are performing well in the industry where TRW
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