TRW Automotive Holdings has reported second-quarter 2005 sales of $US3.4 billion, an increase of 6% compared to the same period a year ago. Net earnings for the quarter were $85 million or $0.83 per diluted share, which compares to $76 million or $0.75 per diluted share in the prior year quarter.
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The company’s earnings were above previously provided guidance primarily due to the timing of its Burgos, Spain facility closure and related expenses, the impact of a $17 million one-time tax benefit and improved operating performance.
TRW announced in July that it received final notification from government authorities approving the closure of its Burgos, Spain manufacturing facility, and as such, restructuring expenses related to this action will now be recorded in the third quarter.
During the second quarter, the company also incurred a $7 million loss on retirement of debt related to the partial redemption of its 10-1/8% senior notes. Second quarter earnings after excluding the one-time tax benefit and loss on retirement of debt were $75 million or $0.73 per diluted share.
TRW reported second-quarter 2005 sales of $3.4 billion, an increase of $202 million or 6% compared to prior year sales of $3.2 billion. The increase resulted primarily from higher sales of new products and foreign currency translation, partially offset by pricing provided to customers and lower vehicle production volumes in North America.
Operating income for second-quarter 2005 was $198 million, a decrease of $4 million compared to the prior year period total of $202 million. The decrease resulted primarily from the continued impact of commodity inflation above prior year levels, foreign currency losses, increased restructuring expenses and other costs, which were partially offset by the benefits of higher sales and cost reduction programs in excess of pricing provided to customers and non-commodity inflation. Restructuring expenses in the second quarter of 2005 were $13 million, as compared to $8 million in the prior year quarter.
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By GlobalDataTRW reported second-quarter 2005 net earnings of $85 million or $0.83 per diluted share, which included the one-time tax benefit of $17 million and $7 million for loss on retirement of debt. Second-quarter 2005 earnings after excluding these items were $75 million or $0.73 per diluted share, which compares to $76 million or $0.75 per diluted share in the prior year period.
Earnings before interest, securitization costs, loss on retirement of debt, taxes, depreciation and amortization (EBITDA) were $324 million for second-quarter 2005, which compares to prior year EBITDA of $325 million. Excluding the year-to-year impact of restructuring expenses, as previously mentioned, EBITDA was higher by $4 million compared to the prior year period.
First Half
TRW reported first-half 2005 sales of $6.6 billion, an increase of $504 million or 8% compared to prior year sales of $6.1 billion.
Operating income for first-half 2005 was $353 million, a decrease of $2 million compared to the prior year total of $355 million.
Restructuring expenses in the first half of 2005 were $21 million, as compared to $13 million in the prior year period.
The company reported first-half 2005 net earnings of $135 million or $1.33 per diluted share, which included the $17 million one-time tax benefit and $7 million loss on retirement of debt. First-half 2005 earnings after excluding these items were $125 million or $1.23 per diluted share.
In comparison, first-half 2004 net earnings were $78 million or $0.78 per diluted share, which included debt retirement and refinancing expenses of $48 million related to the company’s initial public offering and a bank debt refinancing transaction. Net earnings during the 2004 period after excluding debt retirement and refinancing expenses were $126 million or $1.27 per diluted share.
TRW has updated its full-year 2005 outlook to include the second quarter one-time tax benefit and to reflect current industry assumptions. Accordingly, itexpects revenue in the range $12.5 to $12.9 billion and earnings per diluted share in the range of $1.60 to $1.80. Full year outlook after excluding the $17 million one-time tax benefit and the $7 million loss on retirement of debt is expected to be in the range of $1.50 to $1.70 per diluted share, unchanged from previous guidance.
For the third quarter of 2005, TRW expects revenue of approximately $2.9 billion and results ranging from a loss per share of $(0.08) to earnings per diluted share of $0.05. Third quarter guidance includes net pre-tax restructuring costs of approximately $30 million.
