Second quarter earnings at TRW Automotive Holdings rose 7% as strong demand for safety products such as airbags offset weak vehicle production in North America and Europe.
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TRW raised its full-year 2006 earnings and revenue forecasts, but said second-half projections were “tempered” by expectations for weaker industry volumes, the impact of higher interest rates and escalating materials prices, Reuters reported.
Net income increased to $91m, or 88 cents per share, from $85m, or 83 cents a share, a year earlier, while sales rose 2.9% to $3.46bn, according to the report.
Analysts, on average, expected TRW to earn 67 cents per share, excluding one-time items, on revenue of $3.43bn, according to Reuters Estimates.
The report noted that TRW booked $11m in asset impairment and restructuring charges in the quarter, down from about $15m a year earlier – it typically takes about $35m per year of such charges and expects $50m for 2006.
Operating income rose 3.1% to $201m, supported by increased sales and savings from cost-cutting programs. Price cuts on products and increased materials costs tempered the gains, TRW told Reuters.
Excluding debt expense, TRW expects earnings per share to range from $2.05 to $2.35, up from its previous forecast of $1.85 to $2.15, while analysts expect $2.14 per share.
TRW also expects sales to range from $13bn to $13.3bn, up from a prior forecast of $12.8bn to $13.2bn, while analysts expect $13.11bn, Reuters added.
