Automotive safety systems specialist TRW Automotive Holdings has reported third-quarter 2005 net earnings of $10m or $0.10 per share, off compared to $13m or $0.13 per share a year ago.
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Sales increased 6.5% to $2.9bn while net debt increased from the previous quarter due to the impact of seasonal factors on cash flow.
In a statement, TRW said third quarter net earnings were slightly above expectations due to better operating results, but below the comparable prior year period primarily due to higher restructuring costs and increased commodity inflation levels in the 2005 quarter.
During the quarter, the company announced an agreement to acquire a majority stake in Dalphi Metal Espana (aka Dalphimetal), a European based manufacturer of airbags and steering wheels. On October 27, TRW completed the acquisition, which it funded with a combination of cash and existing credit facilities.
“In addition to posting solid results for the quarter and achieving our operational and financial objectives, we made progress on our strategic initiatives with the acquisition of Dalphimetal, which enhances our occupant safety systems business and further broadens the company’s sales diversification,” said president and chief executive officer John Plant.
Operating income for third-quarter 2005 was off $21m year on year to $74m due primarily to the continued impact of commodity inflation, increased restructuring and impairment expenses, and a higher level of research and development costs, which were partially offset by higher sales and cost reduction programmes.
Restructuring and asset impairment expenses in the third quarter of 2005 were $35m, compared to $5m in the prior year quarter.
Operating income excluding the impact of such expenses increased 9% year on year.
For the nine month period ended September 30, TRW reported operating income of $427m, off $23m year on year on sales up 7.7% to $9.5bn.
Restructuring and asset impairment expenses in the first nine months of 2005 were $56m, compared to $18m in the prior year. Operating income after excluding these increased 3%.
Net earnings excluding the impact of the $17m one-time tax benefit in 2005 and losses on retirement of debt from both periods were $135m or $1.32 per share compared to $139m or $1.39 per share.
