TRW Automotive Holdings Corp. (TRW), Autoliv Inc. (ALV), Delphi Automotive PLC (DLPH): Looking for Another Way to Benefit From Auto Sales? Watch This Stock

Page 1 of 2

TRW Automotive Holdings Corp. (NYSE:TRW) supplies components, automotive systems, and modules to automotive OEMs and related aftermarkets. Three major customers of TRW are Ford, General Motors, and Volkswagen AG, with these three together accounting for nearly 50% of its revenue.

In addition,TRW Automotive Holdings Corp. (NYSE:TRW)’s products also find their way to Europe and Asia through OEMs and independent distribution networks. With the auto market being on a good run in the U.S. and TRW having some of the most well-known car makers as clients, it isn’t surprising that the company has been doing well and is up 40% this year.

TRW Automotive Holdings Corp.TRW posted its second-quarter results recently and it beat consensus estimates on both revenue and earnings by an impressive margin.

Revenue & earnings

The automobile sector is seeing growth in general and this is definitely good news for all auto ancillary/component/technology suppliers. For example, General Motors’ biggest market is now China, as in the last quarter, it sold more vehicles in China than in the U.S. TRW Automotive Holdings Corp. (NYSE:TRW) got its share of the pie and as a result, its quarterly revenue grew 6.5% to $4.5 billion.

Needless to say, this jump was facilitated by higher volumes of vehicle production in North America, China, and Brazil. Also, TRW Automotive Holdings Corp. (NYSE:TRW)’s innovative technologies were in strong demand. The company beat consensus estimates by $100 million on revenue, which is not a small figure by any means. This is despite weak signals from the automotive industry in Europe.

Operating profit (before special items) stood at $386 million and is definitely a matter to cheer about, as this is the highest 2Q profit ever generated in its entire history. Increased sales volume was the primary driving factor behind the $47 million increase in operating income on a year over year basis, which was partly offset by a scheduled increase in costs to support future growth of the company.

TRW Automotive Holdings Corp. (NYSE:TRW) also reported an increase in earnings of 17.4% to $2.02 per share as compared to $1.72 in the year-ago quarter, and this beat consensus estimates of $1.70.

Prospects

Production of light vehicles in North America is expected to continue rising, reaching 17 million units by 2015, which in June 2013 stood at 15.9 million units. This, by far, is the highest number reached since December 2007.

China currently is turning out to be a strong opportunity. For the first half of 2013, unit sales increased an impressive 17%. Passenger car sales in June grew 12.3% and Ford was on a roll in China in June, primarily because of its new models. General Motors is already selling more in China than in the U.S.

European market conditions are stabilizing and this also will have a positive impact on the auto industry. One promising indicator for the future is that the rate of decline in registrations moderated sequentially in Q2 compared with the first quarter, suggesting that demand in the region may be stabilizing, although at lower levels. The continued decline has stopped.

World Bank in its report had also mentioned that the world economy in general will be less volatile and has a bullish opinion on growth of economies of the U.S. and Japan as compared to the BRIC nations, which has been revised downward due to expected slowdown in China and India.

TRW also spends on innovative products so as to ensure sustained growth. It recently started production of ‘AC100′ 24 GHz forward-looking radar based on the new PSA platform ‘EMP2’ and is a valuable product addition/enhancement to the ‘DAS’ — Driver Assisted System — business of the company. The company expects the fitment growth of this technology to be phenomenal as governments globally try to reduce road fatalities.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!