S&P Lifts TRW Automotive To 'Stable' Outlook

LIVONIA, Mich. (AP) — Standard & Poor's raised its outlook on TRW Automotive Holdings Corp. to 'Stable' from 'Negative' on Monday, after the auto-parts maker reported better-than-expected second-quarter earnings.

S&P said there was less than a one-in-three chance that it would downgrade TRW in the next year but warned that the market for light vehicles will remain weak into next year.

S&P left the credit ratings on TRW unchanged, including a "B'' corporate credit rating.

TRW has been cutting costs and announced separately on Monday that it raised $269 million from a public offering of stock.

S&P analyst Nancy Messer said the cost-cutting would help cash flow even with the slump in auto production in North America and Europe. S&P added that the stock offering gave credence to TRW's goal of reducing debt, which totaled $3 billion on July 3.

Livonia-based TRW said this month that second-quarter sales fell 39 percent from a year earlier. S&P predicted a decline of about 30 percent for all of 2009 but would "rise somewhat" next year. It said TRW could use up to $500 million in cash this year.

TRW gets more than half its revenue from Europe and about one-third from North America. Its largest customer is Volkswagen AG, at about 18 percent of 2008 sales.

Shares of TRW fell 46 cents, or 2.6 percent, to close at $17.53.