TRW Automotive Holdings Corp. (TRW) recently unveiled its next-generation tire pressure monitoring system (TPMS). This new version uses basic, wheel-mounted direct TPMS sensors to measure the pressure and temperature of air inside a tire. The product is expected to be launched in 2013.
TRW management is highly optimistic about the future of the product and expects the market for direct TPMS to improve further over the next five to ten years, given the potential stringent regulations in Europe and Asia. The direct TPMS is claimed to be the best technical solution for both tire safety and fuel consumption.
This new hybrid system facilitates a premium auto-location system and simultaneously eliminates the need for additional electronics hardware previously required to locate sensor positions. Furthermore, the receiver can be located inside the vehicle, thus significantly reducing housing costs.
TRW Automotive is a leading manufacturer of advanced technology products and services for the automotive markets. Headquartered in Michigan, the company operates in 27 countries through its subsidiaries. These operations primarily involve the design, manufacture and sale of active and passive safety-related products.
In September 2011, TRW Automotive announced a host of investment plans in order to support its long-term business growth. The company plans to open 11 new plants by the end of 2012 and launch a number of new products across each of its key markets.
To support the new growth plans, TRW expects to increase its research and development expenditure by $80 million in 2011. The company has also recruited an additional 500 engineers for its technical centers worldwide.
In the latest reported quarter, TRW realized adjusted earnings of $264 million or $1.99 per share, up 19.5% from the year-ago quarter's adjusted earnings of $221 million or $1.73, driven by the company’s strong market position and accretive expansion strategies.
Revenues in the quarter escalated 15.6% year over year to $4.23 billion. The increase in sales was attributable to higher vehicle production volumes, particularly to domestic vehicle manufacturers, rising demand for TRW's active and passive safety products and favorable currency translation effects.
The company retains a Zacks #3 Rank (Hold) for the short term (1 to 3 months) and we have reiterated a “Neutral” recommendation on the shares for the long term (more than 6 months).
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