TRW Automotive posts fourth-quarter profit after year-ago deficit |

TRW Automotive posts fourth-quarter profit after year-ago deficit

DETROIT – TRW Automotive Holdings Corp., one of the world’s largest auto suppliers, posted a profit in the fourth quarter due to aggressive cost-cutting and growing demand for safety equipment, but predicted Tuesday that sales will weaken this year as U.S. automakers cut North American production.TRW shares rose $1.36, or 5.2 percent, to $27.35 in midday trading on the New York Stock Exchange. The stock briefly hit $29.15 earlier in the day, near the high end of a 52-week range of $17.64 to $30.Net income for the fourth quarter was $59 million, or 57 cents per share, compared with a loss of $62 million, or 63 cents, the year before. A reduction in legal reserves boosted its earnings by $18 million, or 17 cents per share, in the latest quarter, TRW said.The performance beat Wall Street’s expectations. Analysts surveyed by Thomson Financial were looking for quarterly earnings of 33 cents per share.Full-year sales totaled $3.14 billion, down 2 percent from $3.19 billion a year earlier but in line with analysts’ consensus target of $3.13 billion.For the year, profit swelled to $204 million, or $1.99 per share, from $29 million, or 29 cents, in 2004. Adjusted for unusual items such as debt retirement expenses, yearly earnings were $176 million, or $1.72 per share, as sales gained 5 percent to $12.64 billion.TRW President and CEO John Plant said the results were solid considering difficulties in the industry, including production cuts, high costs for aluminum, energy and other commodities, competitive pricing and a weak U.S. dollar. Several U.S. auto suppliers, including Delphi Corp., filed for bankruptcy in 2005.Plant said TRW’s restructuring efforts cost the company $107 million in 2005. The company announced 10 plant closures in 2005, part of its plan to move production from the United States and Europe to lower-cost countries. Plant said TRW expects to spend $50 million before taxes on restructuring in 2006.”We are making the difficult decisions today that will provide benefits for the journey ahead,” Plant said.Plant said TRW offset losses through increased sales of safety products, particularly electronic stability control. Stability control, which straightens a vehicle when it senses the driver has gone off course, is being added to more vehicles and will be a $1 billion industry by 2009, Plant predicted.Plant said TRW also benefited from increased revenues from Dalphi Metal Espana SA, a Madrid-based supplier more commonly known as Dalphimetal. TRW purchased a controlling interest in Dalphimetal in the fourth quarter for $134 million. Dalphimetal will add around $360 million to TRW’s bottom line in 2006, Plant said.The company forecast that its first-quarter results will range from break-even to earnings of 15 cents per share on about $3.3 billion in revenue. Full-year earnings are estimated at $1.60 to $1.85 per share on revenue of $12.8 billion to $13.2 billion.Analysts predict first-quarter earnings of 49 cents per share and $3.37 billion in revenue, and yearly income of $1.72 per share on $12.99 billion in revenue.”The bottom line is we see little to no earnings growth in ’06,” Goldman Sachs analyst Robert Barry said in a research note to investors. “Indeed, flat earnings may end up being a notable accomplishment, given the stresses the auto sector is facing.”Livonia-based TRW employs 60,000 people in 24 countries.—On the Net:TRW Automotive Holdings Corp.:

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