QUOTE AND NEWS
Automotive World  Sep 12  Comment 
TRW is shedding its engine valve business to concentrate on safety, a key area of interest for its suitor ZF. The post TRW sharpens safety focus ahead of further ZF talks appeared first on Automotive World.
TheStreet.com  Sep 11  Comment 
NEW YORK (TheStreet) --aTRW Automotivea was gaining 2.2% to $103.09 Thursday following news that ZF Friedrichshafenais close to making a bid to acquire the American auto parts supplier. Germany-basedaZF Friedrichshafen plans to sell its stake in...
TheStreet.com  Sep 10  Comment 
NEW YORK (TheStreet) --aTRW Automotive Holding Corp. announced on Wednesday that it has entered into an agreement with Federal Mogul Holdings Corp. to sell its engine valve business for $385 million in cash. The supplier of automotive...
Wall Street Journal  Sep 10  Comment 
Market Intelligence Center  Sep 9  Comment 
TRW Automotive Holdings Corp (TRW) presents a trading opportunity that offers a 4.62% return in just 130 days. A covered call on TRW Automotive at the $100.00 level expiring on Jan. '15 offers an assigned return rate of 4.62% or 12.98%...
Market Intelligence Center  Sep 4  Comment 
Option-trade picking algorithms patented by MarketIntelligenceCenter.com found a trading opportunity with TRW Automotive Holdings Corp (TRW) that should provide a 3.73% return in just 135 days. Sell one Jan. '15 call at the $100.00 level for each...
TheStreet.com  Sep 3  Comment 
NEW YORK (TheStreet) --aTRW Automotive Holdings Corpa astock is lower by -2.25% to $98.93 in after-hours trading as German transmissions company ZF Friedrichshafen AG advanceD plans to take over TRW Automotiveaat a price of betweena$105 to $110...
Market Intelligence Center  Aug 25  Comment 
The patented option-trade picking algorithms that power MarketIntelligenceCenter.com's Artificial Intelligence Center have selected a covered-call trade on TRW Automotive Holdings Corp (TRW) that includes 5.41% downside protection. Sell one...
Top Foreign Stocks  Aug 16  Comment 
German  auto-parts maker ZF Friedrichshafen AG announced a bid to acquire US-based TRW Automotive Holdings Corp. (TRW) in a deal worth $12.0 billion last month. However the deal is being held due to the German firm's negotiations with Robert...




 

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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