Auto-parts maker TRW Automotive Holdings Corp. (TRW) swung to a
first-quarter loss as global vehicle production continued to
slump.
TRW also lowered its 2009 sales forecast by $800 million to a
range of $10.1 billion to $10.5 billion, with $2.5 billion coming
in the second quarter. On average, analysts polled by Thomson
Reuters were looking for $2.86 billion in the second quarter.
The maker of brakes and airbags swung to a first-quarter loss of
$131 million, or $1.30 a share, from year-earlier earnings of $94
million, or 92 cents. The latest results included 16 cents in
restructuring charges and write-downs. Analysts were expecting a
loss of $1.71 a share.
Sales slumped 42% to $2.39 billion, amid plunging worldwide auto
production and the effects of the stronger dollar. The company's
February forecast was $2.4 billion. Gross margins fell to 1.3% from
8.2%.
TRW expects full-year automobile production to total 8.2 million
units in North America and 15.9 million units in Europe, down 12%
and 3.6%, respectively, from February's forecast.
Parts suppliers have taken major financial hits as U.S. auto
makers cut production in the wake of slumping sales both at home
and around the world.
On top of that, Chrysler LLC's Chapter 11 bankruptcy filing
stands to have a dramatic impact on suppliers. The auto maker is
idling all of its U.S. plants for the 60 days the company expects
the bankruptcy process to last. That is compounded by General
Motors Corp.'s (GM) planning to shut down many of its North
American plants this summer to control inventory.
TRW said its drew down additional funds under its $1.4 billion
credit revolver early last month amid the ongoing credit-market
constraints. In February, accounting firm Ernst & Young LLP
raised questions about TRW's ability to continue as a going concern
if it were unable to obtain a waiver or amendment should it breach
debt covenants.
TRW shares closed Tuesday at $9.40 and were inactive premarket.
The stock has more than doubled in value this year, but remains
down 55% from September.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com