TRW Inc. (NYSE:TRW – news) announced today that it expects third quarter earnings per share to be below current consensus estimates of $1.05 per share.

The shortfall is primarily the result of a further weakening of foreign currencies, production cutbacks announced by Ford, weaker than expected revenues from the company’s space and electronics business, increased investments in technology bank initiatives, and a higher level of interest expense. As a result, earnings per share are expected to be reduced by approximately $0.19 to $0.24 in the third quarter. These issues may have a continuing impact on the fourth quarter.

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Despite the anticipated earnings shortfall, the company believes it will achieve its previously announced cash flow goal of reducing net debt by approximately $300 million in the second half of 2000.

During the third quarter TRW will also recognize after-tax charges relating to the following events:

  • Consolidation of air bag operations — TRW’s occupant safety systems business will consolidate two inflator propellant manufacturing operations into one site in order to optimize operating efficiencies. As a result, a charge of approximately $36 million, primarily non-cash, will be recognized in the third quarter.
  • Product recall and inventory adjustments — In July a commercial truck recall was issued involving approximately 200,000 parts that were improperly heat treated by TRW’s commercial steering systems business during a 12-week period of 1999. In addition, adjustments relating to inventory and operating systems at two automotive manufacturing facilities have been identified. These issues will result in approximately $14 million of charges in the third quarter.

    TRW will report its third quarter 2000 results on October 18, 2000.

    TRW provides advanced-technology products and services for the global automotive, aerospace, and information systems markets.

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