Automotive Holdings Corp.
) reported a 28% decline in profits (27% on per share basis) to
$211 million or $1.62 per share in the first quarter of 2012 from
$292 million or $2.21 in the first quarter of 2011 (all excluding
restructuring and debt retirement charges), beating the Zacks
Consensus Estimate by 2 cents per share.
Revenues in the quarter edged up 2% to $4.2 billion. The
increase in sales was attributable to strong demand for the
company's active and passive safety products and higher vehicle
production volumes in North America, partially offset by lower
vehicle production volumes in Europe and the negative impact of
Adjusted operating profits in the quarter dropped 13% to $333
million from $382 million in the prior year. The decline was
attributable to a higher mix of low-margin business, planned
increases in costs in order to support future growth, higher raw
material prices and adverse impact from currency fluctuations.
TRW had cash and cash equivalents of $997 million as of March
30, 2012 compared with $1.2 billion as of December 31, 2011. Total
debt was almost flat at $1.5 billion as of March 30, 2012 compared
with the same at the end of 2011. The debt-to-capitalization ratio
went down slightly to 32% from 34% as of December 31, 2011.
In the quarter, the company had a cash outflow of $102 million
from operations compared with a cash flow of $81 million in the
prior-year quarter. The decline in cash flow was primarily
attributable to lower earnings and higher inventories.
Capital expenditures (including other intangible assets)
increased to $96 million from $67 million in the first quarter of
2011 in order to support the company's growth initiatives.
Consequently, free cash flow deteriorated to the use of $198
million compared with an inflow of $14 million in the comparable
period last year.
For full year 2012, TRW anticipates production of 14.7 million
units in North America and 18.9 million units in Europe. Based on
these production levels and expected foreign currency exchange
rates, sales are expected between $16.3 billion and $16.6 billion
for the year, including $4.2 billion in the second
TRW Automotive is a leading manufacturer of advanced technology
products and services for the automotive markets. Headquartered in
Michigan, U.S., the company operates in 27 countries through its
These operations primarily involve the design, manufacture and
sale of active and passive safety related products. Its major
Ford Motor Co.
General Motors Company
). The three customers account for nearly 50% of sales.
Currently, the company retains a Zacks #3 Rank on its stock,
which translates to a Hold rating for the short term (1 to 3
months), and we have reiterated a Neutral recommendation on its
shares for the long term (more than 6 months).
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
TRW AUTOMTV HLD (TRW): Free Stock Analysis
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