QUOTE AND NEWS
Automotive World  Nov 20  Comment 
ZF Friedrichshafen AG (“ZF”) and TRW Automotive Holdings Corp. (NYSE: TRW) today announced that they welcomed the decision by the stockholders of TRW to approve the acquisition of TRW by ZF. At a special meeting of TRW’s stockholders held...
Automotive World  Nov 12  Comment 
TRW, a Sunderland automotive steering systems manufacturer, is creating 130 jobs and doubling its factory floor space to cope with expected demand from international clients for a new technology developed in the city. Sunderland City Council is...
Market Intelligence Center  Nov 3  Comment 
The patented option trade-picking algorithms behind MarketIntelligenceCenter.com's Artificial Intelligence Center have selected a covered call trade on TRW Automotive Holdings Corp (TRW) that includes 4.05% downside protection. Sell one contract...
Automotive World  Oct 29  Comment 
Despite the transformative M&A activity seen in Q3, TRW leadership is keen to emphasise that the company hasn't lost sight of the day-to-day business. The post M&A expenses bite into TRW’s bottom line appeared first on Automotive World.
Benzinga  Oct 28  Comment 
On Tuesday, TRW Automotive Holdings Corp. (NYSE: TRW) reported third quarter earnings, beating EPS estimates by $0.05 per share. Following the upbeat earnings, auto supplier names were trending higher Tuesday: Lear Corporation (NYSE: LEA)...
Automotive World  Oct 28  Comment 
TRW Automotive Holdings Corp. (NYSE: TRW), the global leader in active and passive safety systems, today reported third quarter 2014 financial results with sales of $4.2 billion, a decrease of 1% compared to the prior year period (up 3% excluding...
newratings.com  Oct 28  Comment 
WASHINGTON (dpa-AFX) - Automotive supplier TRW Automotive Holdings Corp. (TRW) said Tuesday that net income for the third quarter declined to $189 million from $197 million in the comparable quarter last year. Earnings per share for the latest...
Automotive World  Oct 27  Comment 
TRW Automotive Holdings Corp. (NYSE: TRW), has announced that its third generation electrically powered steering column drive (EPS CD) technology has recently launched on two major vehicle platforms which include – for Europe – the VW Polo,...
Market Intelligence Center  Oct 27  Comment 
Option-trade picking algorithms patented by MarketIntelligenceCenter.com found a trading opportunity with TRW Automotive Holdings Corp (TRW) that should provide a 3.57% return in just 172 days. Sell one Apr. '15 call at the $100.00 level for each...
SeekingAlpha  Oct 10  Comment 
By Mike Smitka: ZF Friedrichshafen is buying TRW (NYSE:TRW); JCI sold its automotive business to Gentex and Visteon. Are we in a new era of supplier M&A activity? The previous wave didn’t work out well – Dana, Tower, Dura, Lear and others...




 

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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