DETROIT (Reuters) -- TTRW Automotive Holdings Corp., which generates more than half its sales from Europe, posted a better-than-expected first-quarter profit Wednesday on higher auto production and benefits from cost-cutting restructuring.
TRW, which produces brakes, electronic stability controls, airbags and seat belts, posted net earnings of $2.04 million, or $1.61 per share, compared with a loss of $131 million, or $1.30 per share a year earlier.
First-quarter sales rose 50 percent to $3.6 billion.
North American vehicle production bounced back from recession-racked 2009 figures, but the surprise that helped boost TRW results in the first quarter was better-than-anticipated strength of vehicle sales in Europe, company spokesman John Wilkinson said today.
In 2009, Europe accounted for 58 percent of TRW's sales. North America accounted for about a quarter of total sales.
Excluding one-time items, TRW's quarterly earnings per share were $1.65, compared to analysts' expectations of earnings of 73 cents per share, according to Thomson Reuters I/B/E/S.
For full-year 2010, TRW expects sales to be $12.9 billion to $13.3 billion, with the second quarter to show about $3.4 billion.
The new 2010 sales guidance announced today was higher than the estimate TRW gave in February of between $12.3 billion and $12.9 billion.
That outlook is based on North American vehicle sales of 11.7 million and European full-year sales of 16.7 million vehicles, TRW said.
While higher commodity prices were not a significant impact on first-quarter earnings, TRW CEO John Plant warned that "we expect increasing commodity prices to negatively impact our results going forward."
Commodity prices rising
Plant said TRW needs to counter higher commodity prices by managing costs and increasing businesses in key areas surrounding vehicle technology.
"TRW entered 2010 from a position of strength thanks to our hard fought accomplishments in 2009," Plant said. "Increasing vehicle production combined with our lower cost structure is continuing to have a significant positive impact on our results."
Plant said TRW continues to be guarded when it comes to rest-of-year auto production in its main market Europe.
"We continue to be cautious with regard to European production levels in the second half of the year," Plant said.
TRW ranks No. 10 on the Automotive News Europe list of the top 100 global suppliers, with sales to automakers of $15 billion in 2008. Europe accounted for 56 percent of that total.