TRW first-quarter profit tops estimates, boosts sales outlook

DETROIT Tue Apr 30, 2013 1:11pm EDT

DETROIT (Reuters) - TRW Automotive Holdings Corp (TRW.N) posted stronger-than-estimated quarterly profit on Tuesday and hiked its full-year sales outlook as it raised its forecast for industry vehicle production in North America and Europe.

Shares in the company rose 2.3 percent.

The auto parts supplier's revenue was better than Wall Street expected as industry production in Europe was not as weak as feared, while output in China was strong, Morgan Stanley analyst Ravi Shanker said.

"The market will be encouraged that TRW dodged a European bullet in the first quarter (and) raised guidance for the year," he said in a research note.

Net income in the first quarter fell 21 percent to $162 million, or $1.29 a share, from $206 million, or $1.59 a share, in the year-earlier period.

The decline was driven by more sales of lower-profit products as well as planned increases in costs to support future growth, TRW said. The quarter included $37 million in restructuring charges.

Excluding one-time items, the company earned $1.51 a share, 7 cents stronger than analysts' expectations, according to a poll by Thomson Reuters I/B/E/S. Guggenheim Securities analyst Matthew Stover said a lower-than-expected tax rate added about 3 cents a share to results.

Revenue edged up to $4.21 billion, topping the $4.13 billion that analysts expected. The company credited growth in China for offsetting sharply lower vehicle production in Europe.

Livonia, Michigan-based TRW, which makes braking systems, seat belts and airbags, expects full-year sales in the range of $16.6 billion to $16.9 billion. In February, it forecast $16.4 billion to $16.7 billion.

It sees second-quarter sales of about $4.3 billion.

For the year, the company sees industry production volumes of 16 million vehicles in North America, up from its previous forecast of 15.8 million.

It also boosted its outlook for European production by 100,000 to 18.4 million vehicles and said it expected a modest recovery in the second half. TRW still expects expansion in production volumes in China and the rest of the world.

TRW's stock was up 2.3 percent at $60.25 in morning trading on the New York Stock Exchange.

(this story is corrected with amount of restructuring charges in the quarter to $37 million from $39 million in sixth paragraph and removes reference to asset impairment charges)

(Reporting by Ben Klayman; Editing by Chizu Nomiyama and Jeffrey Benkoe)

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