On Jul 10, 2014, we issued an updated research report on TRW Automotive Holdings Corp. (TRW). This Zacks Rank #2 (Buy) stock delivered positive earnings surprises in all of the trailing four quarters with an average beat of 11.03%.
TRW Automotive reported a 19.9% increase in its first-quarter 2014 earnings to $1.81 per share, which exceeded the Zacks Consensus Estimate of $1.65. Revenues rose 5% to $4.4 billion, surpassing the Zacks Consensus Estimate of $4.31 billion. The increase was driven by strong demand for TRW’s innovative technology, increased vehicle production volumes and a positive impact of currency translation, partly offset by the negative impact of exiting some businesses in the North American brake component and assembly operations.
TRW Automotive is globally recognized as a major and the most diversified supplier of automotive systems, modules and components to OEMs and the related aftermarket. The company has a strong financial position, which facilitates capital deployment. During the first quarter of 2014, TRW repurchased 3.9 million shares of its common stock for $400 million. The company also paid off bond debt with a face value of $469 million. Moreover, TRW continues to invest in innovative technologies that enable it to win contracts.
For full-year 2014, TRW Automotive’s revenues are expected in the range of $17.4–$17.7 billion, up from the previous guidance of $17.3–$17.6 billion. Revenue expectations are based on higher vehicle production volumes and the impact of foreign currency translations.
Key Picks from the Sector
Some other automobile stocks worth considering include Meritor, Inc. (MTOR), ChinaAutomotive Systems Inc. (CAAS) and Gentex Corp. (GNTX). All these stocks sport a Zacks Rank #1 (Strong Buy).
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