Vehicle safety systems specialist TRW Automotive has boosted second quarter sales 18.4% to $4.4bn and net profit to $127m from $97m a year ago.
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Second quarter results last year included $8m of refinancing costs.
Operating income also rose from $205m to $224m despite increased restructuring and asset impairment charges offset by lower interest expense.
The Q2 2008 sales rise was helped by foreign exchange gains, higher vehicle production in Europe and China and continued growth of safety products in all markets, including above-trend sales of lower margin modules. This was partially offset by lower vehicle production in North America and price cuts.
Cost cuts and efficiency gains, including reductions in pension and other post-retirement benefit costs, higher product volumes and an insurance recovery worth $14m helped boost operating income though this was offset by price cuts, higher material prices, a negative mix of products sold and a $13m increase in restructuring and asset impairment expenses.
First half sales rose 17.3% to $8.6bn. Operating income was up 8.4% to $412m and net earnings soared to $221m compared to $11m in H1 2007 period. H1 2007 net earnings were affected by debt retirement costs.
TRW has increased its full year outlook to reflect the strong second quarter results but has lowered expectations for the second half.
Sales are now expected to be in the range of $16.4 to $16.8bn (including third quarter sales of approximately $3.9bn) and full year net earnings per share are now expected in the range of $2.40 to $2.70.
“In recent months, the outlook for the North American automotive industry has further deteriorated with the decline in overall production of light vehicles, the shift of production away from light trucks to passenger cars and severe commodity inflation being the primary pressures in this market,” the supplier said.
“Our updated 2008 outlook reflects the weaker outlook for the North American market as well as our expectations for a softening production environment in Europe. The pressures we are seeing for the second half of 2008 will undoubtedly continue into 2009.”
