TRW Automotive Holdings, the specialist in active and passive safety systems, booked second quarter 2012 net profit of $220m or $1.71 per share, down from $293m and $2.21 a year ago. Sales were flat at $4.2bn.
TRW said higher taxes, growth costs and raw material prices were the main reasons for the profit decline.
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“TRW continued to move forward in the second quarter despite a notable decline in European vehicle production,” said chairman and CEO John Plant. “[Our] solid performance through the first half of 2012 provides a firm foundation for TRW to reach its full year goals.”
Durign the quarter, increasing demand for active and passive safety products and improved vehicle production volumes in North America were offset by lower vehicle production volumes in Europe and the negative impact of currency movements.
Second quarter operating income was $337m versus $368m in Q2 2011.
First half
First half 2012 sales rose $104m to $8.4bn but operating income fell to $668m from $740m due mainly to more lower margin business, planned increases in costs to support future growth, higher raw material prices and, to a lesser degree, negative currency movements.
H1 net profit of $426m, or $3.30 per share, compared to $574m and $4.34 the previous year.
2012 Outlook
TRW expects full year industry production volumes of 14.9m units in North America and 18.8m units in Europe. Production for the Detroit Three manufacturers will be up approximately 6% year on year and increased vehicle production volumes in China and the rest of world regions is also anticipated.
Full year 2012 sales are now expected to range between $16.2bn and $16.4bn, with Q3 sales expected to be approximately $3.9bn.
“TRW remains cautious in the near-term as our 2012 guidance… reflects the difficult economic environment in Europe and its negative impact on the automotive industry. Managing through these challenges while protecting the company’s profitability and implementing TRW’s extensive growth strategy is essential to ensure continued success in 2012 and beyond,” added Plant.
