TRW Automotive Holdings Corp. (TRW) has reported a profit of $209 million or $1.65 per share in the first quarter of the year in contrast to a loss of $115 million or $1.14 per share in the prior-year period. The profit was significantly higher than the Zacks Consensus Estimate of 72 cents per share.
The improvement in profits was caused by higher sales due to an increase in automotive production, TRW’s lower cost structure and favorable movements in currency exchange rates. Sales in the quarter shot up by 50% to $3.6 billion.
Excluding special items, operating income in the quarter was $307 million compared with an operating loss of $71 million in the prior-year quarter. This was driven by the higher sales, the positive impact of the company’s restructuring and cost reduction measures, lower raw material prices and favorable currency exchange rate movements.
TRW had cash and cash equivalents of $634 million as of Apr 2, 2010. Long-term debt amounted to $2.2 billion as of that date. This reflected a long-term debt to capitalization ratio of 62%.
In the quarter, net cash flow provided by operating activities was $21 million compared to an outflow of $254 million in the previous year. This was attributable to higher income, partially offset by higher working capital requirements. Capital expenditures were $45 million compared to $35 million a year ago.
TRW anticipates sales in the range of $12.9 billion–$13.3 billion for full year 2010 and $3.4 billion for the second quarter of the year. The expectations were based on the assumptions for industry production volumes of 11.5 million units in North America and 16.7 million units in Europe.
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