QUOTE AND NEWS
Benzinga  Feb 19  Comment 
In a report published Wednesday, Morgan Stanley analyst Ravi Shanker reiterated an Overweight rating and $87.00 price target on TRW Automotive (NYSE: TRW). In the report, Morgan Stanley noted, “The secular power of the TRW story is likely to...
TheStreet.com  Feb 14  Comment 
NEW YORK (TheStreet) -- TRW Automotive  peaked at an intraday record high of $81.37 during Friday's session, after the auto parts maker reported better-than-expected earnings. By market close, shares retreated slightly, up 4.6% to $79.81....
SeekingAlpha  Feb 14  Comment 
TRW Automotive Holdings Corp. (TRW) Q4 2013 Earnings Conference Call February 14, 2014 08:30 am ET Executives John Plant – President & Chief Executive Officer Joe Cantie – Executive Vice President & Chief Financial Officer ...
Automotive World  Feb 14  Comment 
Record fourth quarter sales of $4.5 billion, an increase of 12% compared to the prior year; record full year sales of $17.4 billion, an increase of 6% compared to 2012. Fourth quarter gaap net earnings of $3.00 per diluted share; full year gaap...
Wall Street Journal  Feb 14  Comment 
TRW Automotive Corp. withstood economic pressures, particularly in Europe, to deliver fourth-quarter earnings and sales that exceeded expectations.
StreetInsider.com  Feb 14  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/TRW+Automotive+%28TRW%29+Tops+Q4+EPS+by+20c/9172036.html for the full story.
Benzinga  Jan 14  Comment 
In a report published Tuesday, Morgan Stanley analyst Adam Jonas Maintained an Overweight rating on TRW Automotive Holdings Corp. (NYSE: TRW), saying Europe op. leveraged coil and ready to spring. According to the report, TRW management...
SeekingAlpha  Jan 7  Comment 
ByTrading the Spread: Following its near collapse during the 2008 financial crisis, the U.S. automotive industry continues its pronounced rebound on the heels of positive economic momentum and strong fundamental demand drivers. In North America,...
Benzinga  Dec 24  Comment 
Below are the mid-cap auto parts stocks on the NYSE and the NASDAQ in terms of revenue. The trailing-twelve-month revenue at TRW Automotive Holdings (NYSE: TRW) is $16.97 billion. TRW Automotive's ROE for the same period is 27.74%. The...




 

TRW Automotive Holdings (NYSE: TRW) makes auto parts and is the world's second-largest producer of auto safety components, with a significant share of global sales in 2009. TRW is a leader in the auto safety industry, and it supplies parts to many large auto companies including General Motors (GMGMQ), Ford Motor Company (F), and Volkswagen (VLKAY).[1] In 2009, TRW had total revenues of $11.6 billion, posting a net income of $73 million.

Rising prices for raw materials such as steel can have significant impact on TRW's cost of goods sold (COGS) and can significantly impact earnings. On the other hand, a government mandate that all passenger cars have side airbags by 2012[2] has given TRW's revenues a boost in its Occupant Safety Systems segment. Likewise, a weak U.S. dollar gives TRW's non-U.S. customers more incentive to buy their products, because they are relatively cheaper with a weak dollar.

Company Overview

Business Financials

For 2009, TRW posted total revenues of $11.6 billion, a sharp decline from its 2008 total revenues of $15 billion.[3] Although sales were down across the board for TRW, the biggest difference came in its Chassis segment, where total sales declined $1.7 billion.

Despite the declining revenues, TRW was able to post a net income in 2009 of $73 million in 2009, as opposed to a $780 million loss in 2008. This was largely due to a one time $787 million impairment to TRW's goodwill that was incurred in 2008.[4]

Business Segments

TRW breaks its operations into four segments: i) Chassis, ii) Occupant Safety Systems, iii) Electronics, and iv) Automotive Components.

Chassis Systems (59% of 2009 revenue)

This segment manufactures products for steering, braking, suspension and other applications. Total sales for this segment declined $1.7 billion in 2009 to $6.9 billion.[3] The decrease in sales was driven mostly by lower volume and price reductions provided to customers, which combined totaled $1,246 million.[5] Foreign currency exchange also had a net unfavorable impact on sales of $443 million.

Occupant Safety Systems (25.2%)

Occupant Safety Systems produces safety products related to air bags, seat belts, and vehicle security. This segment's main products include airbags, seat belts, and safety electronics. In 2009, this segment's net sales decreased $901 million to $2.9 billion.[6]

Electronics (7.4%)

The electronics segment had its net revenues decline $320 million in 2009 to $864 million.[3]

Automotive Components (11.5%)

Automotive Components produces components for engines, controls, and fasteners. The company's engine components consist mostly of engine valves. In 2009, total net sales declined by $320 million in to $864 million.[3]

Key Trends and Forces

All passenger cars sold in the U.S. must have side airbags by 2012

In 2007, the National Highway Traffic Safety Administration announced a new regulation under which all cars sold in the United States must have side airbags by 2012.[7] As a result, TRW's Occupant Safety Systems revenue jumped over 9% from $4,326 million in 2006 to $4,714 million in 2007.[8]

TRW's three largest customers accounted for 45.7% of 2009 revenue

TRW is heavily dependent on a few key Auto Makers, as its three largest customers accounted for 45.7% of its 2009 revenue. Volkswagen (VLKAY), Ford Motor Company (F), and General Motors (GM) accounted for 19.1%, 15.6%, and 11.1% of TRW's 2009 revenue, respectively.[1] If any of these customers were to order fewer of TRW's products, go out of business, or start ordering components from a new supplier, TRW would find itself losing a large percentage of its revenue. Sluggish conditions in the U.S. auto market are of particular concern to GM and Ford, two of TRW's largest customers.

Competition

  • Autoliv (ALV) manufactures airbags and seat belts that compete directly with TRW's safety products.[9]
  • Takata Corporation (TYO:7312) also sells airbags, seat belts, and related safety components to auto manufacturers.[10]
  • Key Safety Systems, a private company, also competes with TRW's products in the auto safety industry.[11]
  • Delphi Corporation (DPHIQ) competes with both TRW's safety products and its control products from the Automotive Components segment.[12]
  • Visteon (VC) makes electronic safety and security parts.[13]


References

  1. 1.0 1.1 TRW 10-K 2009 Item 1 Pg. 9
  2. Edmunds: NHTSA Mandates Side Airbag Protection in All Passenger Cars
  3. 3.0 3.1 3.2 3.3 TRW 10-K 2009 Item 7 Pg. 34
  4. TRW 10-K 2009 Item 7 Pg. 26
  5. TRW 10-K 2009 Item 7 Pg. 35
  6. TRW 10-K 2009 Item 7 Pg. 36
  7. Edmunds: NHTSA Mandates Side Airbag Protection in All Passenger Cars
  8. TRW 2007 10-K: Occupant Safety Systems, pg 35
  9. Google Finance: ALV
  10. Business Week: 7312.T
  11. Google Finance: Key Safety Systems, Inc.
  12. Google Finance: DPHIQ
  13. Google Finance: VC
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