TRW Automotive’s Q2 income drops 25%
Higher costs, flat sales in Europe cited.
LIVONIA, Mich.: Auto parts maker TRW Automotive Holdings Corp. reports its second-quarter net income fell 25%, pulled down by a higher tax rate and a jump in costs.
The company, with seven plants in Ontario, attributed the earnings drop to a higher effective tax rate combined with a jump in costs related to future growth plans and higher raw material prices. But its adjusted earnings beat Wall Street expectations.
Its shares climbed $2.24, or 6% per cent, to $38.66. They are up 34% since hitting a low for the past year of $28.85 in mid-December.
The Livonia, Mich.-based auto supplier of safety systems earned $220 million in the three months ended June 29, down from $293 million in the same quarter last year.
Sales were relatively flat at $4.24 billion, as lower European vehicle production levels reduced demand.
Excluding the effects of unfavourable currency exchange rates and divestitures, sales rose more than 8%, the company said. Analysts expected revenue of $4.2 billion.
Based on its current expectations for global automotive production, TRW said it expects its third-quarter revenue to total about $3.9 billion and its 2012 revenue to total between $16.2 billion and $16.4 billion.
Analysts polled by FactSet expect $3.91 billion in third-quarter revenue and $16.31 billion in 2012 revenue.
The company’s Ontario plants are located in Midland where there are two, Tillsonburg, also two, Windsor, Woodstock and St. Catharines.
Worldwide, it operates 185 facilities in 26 countries and employs more than 60,000 people.