LIVONIA, Mich. - Auto parts maker TRW Automotive Holdings Corp. said Tuesday that its second-quarter net income fell 25 per cent, pulled down by a higher tax rate and a jump in costs.
The company attributed the earnings drop to a higher effective tax rate combined with a jump in costs related to future growth plans and higher raw material prices. But its adjusted earnings beat Wall Street expectations.
Its shares climbed $2.24, or 6 per cent, to $38.66 in morning trading. They are up 34 per cent since hitting a low for the past year of $28.85 in mid-December.
The Livonia, Mich.-based auto supplier earned $220 million, or $1.71 per share, in the three months ended June 29, down from $293 million, or $2.21 per share, in the same quarter last year.
Excluding one-time items such as restructuring charges and tax benefits, TRW posted adjusted earnings of $1.72 per share. Analysts surveyed by FactSet expected earnings of $1.55 per share.
Sales were relatively flat at $4.24 billion, as lower European vehicle production levels reduced demand.
Excluding the effects of unfavourable currency exchange rates and divestitures, sales rose more than 8 per cent, the company said. Analysts expected revenue of $4.2 billion.
Based on its current expectations for global automotive production, TRW said it expects its third-quarter revenue to total about $3.9 billion and its 2012 revenue to total between $16.2 billion and $16.4 billion.
Analysts polled by FactSet expect $3.91 billion in third-quarter revenue and $16.31 billion in 2012 revenue.
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