TRW Automotive Holdings Corporation (TRW) has used cost cutting and restructuring to survive one of the biggest downturns in automobile history. TRW is trading with a forward P/E of 13.09.
Company Description
TRW supplies products for automobiles including integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, seat belts and airbags, electronics and aftermarket replacement parts and services.
TRW operates in 26 countries serving 40 major vehicle manufacturers.
TRW’s Winning Streak
TRW has been incredibly consistent at surprising on earnings estimates since 2005. The company has not missed on estimates and has met them only twice in the last 5 years. (I hope I’m not jinxing them now.)
You can see the great earnings surprise win streak below.
In the last four quarters the company has beaten by an average of 144.53%.
Zacks Consensus Estimates Rise
Given the company’s track record of beating the Zacks Consensus, it is not surprising that the estimates have been trending higher as the earnings report date approaches. The fourth quarter Zacks Consensus has risen 1 cent to 48 cents in the last week with 1 estimate moving higher in that time.
Analysts are very bullish about 2010. They expect year over year earnings growth of 275.37%. The 2010 Zacks Consensus has moved higher by 7 cents in the last 30 days to $1.79 from $1.72 per share.
TRW is expected to report fourth quarter earnings on before the bell on Feb 25.
Third Quarter Sales Declined
On Nov 4, TRW reported its third quarter results which saw sales fall 13.5% to $3.1 billion from the year ago period. The decline was the result of reduced vehicle production volumes across most geographic regions.
Suffice it to say, it’s been a rough couple of years for any company involved in the automotive industry. TRW’s third quarter was boosted by restructuring and cost containment.
The company was cautiously optimistic about the fourth quarter outlook as forecasts were rising for increasing vehicle production.
“Although it appears the bottom of the financial crisis has been reached, full recovery will be a long and gradual process,” said John C. Plant, CEO.
Value Fundamentals
TRW Automotive is a Zacks #1 Rank (strong buy) stock. It has a price-to-book ratio of just 1.60.
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor in charge of the market-beating Zacks Value Trader service.
