TRW Automotive Holdings Corp. reported earnings that increased 17.4% to $2.02 per share in the second quarter of the year from $1.72 (all excluding special items) a year ago and exceeded the Zacks Consensus Estimate of $1.70. Net earnings (excluding special items) went up 14.0% to $252 million from $221 million in the second quarter of 2012.
Revenues in the quarter grew 6.5% to $4.5 billion driven by strong demand for TRW’s innovative technologies and higher vehicle production volumes in North America and China. Revenues were higher than the Zacks Consensus Estimate of $4.4 billion.
Operating income rose 14.2% to $385 million (8.5% of sales) from $337 million (7.9%) in the 2012-quarter. Excluding restructuring charges of $1 million and $2 million in 2013 and 2012 quarters, respectively, operating income increased $47 million year-over-year driven by increased sales, partially offset by planned increases in costs to support future growth.
Earnings before interest, taxes, depreciation and amortization and special items were $492 million in the quarter versus $444 million in the second quarter of 2012.
TRW had cash and cash equivalents of $1.2 billion as of Jun 28, 2013, almost flat compared with the same as of Dec 31, 2012. Total debt increased to $1.9 billion as of Jun 28, 2013 compared with $1.5 billion as of Dec 31, 2012.
In the first six months of the year, net cash flow from operating activities increased 4.5% to $93 million from $89 million in the same period of 2012. Capital expenditures also increased to $271 million in the period from $200 million in the 2012-period. Consequently, free cash flow use rose to $178 million from $111 million in the comparable period last year.
For full year 2013, TRW Automotive Holdings anticipates production of 16.1 million units in North America and 18.6 million units in Europe. Based on these production levels, the company’s first half performance and expectations for foreign currency exchange rates, revenues for the year are expected in the range of $16.8 billion to $17.0 billion, with $4.1 billion in the third quarter.
TRW Automotive is a leading manufacturer of advanced technology products and services for the automotive markets. Headquartered in Mich., U.S., the company operates in 25 countries through its subsidiaries. These operations primarily involve the design, manufacture and sale of active and passive safety related products. Currently, the company retains a Zacks Rank #3 on its stock, which translates to a Hold rating for the short-term (1 to 3 months).
The company’s major customers include Ford Motor Co. (F - Analyst Report), General Motors Company (GM - Analyst Report) and Volkswagen AG (VLKAY - Snapshot Report). They account for nearly 50% of its revenues.