TRW Automotive Holdings (TRW) Q1 2012 Earnings Call May 01, 2012 8:30 am ET Executives Mark Oswald - Director of Investor Relations John C. Plant - Chairman, Chief Executive Officer and President Joseph S. Cantie - Chief Financial Officer, Executive Vice President and Treasurer Analysts Peter Nesvold Rod Lache - Deutsche Bank AG, Research Division Christopher J. Ceraso - Crédit Suisse AG, Research Division Matthew T. Stover - Guggenheim Securities, LLC, Research Division John Murphy - BofA Merrill Lynch, Research Division Ravi Shanker - Morgan Stanley, Research Division Brett D. Hoselton - KeyBanc Capital Markets Inc., Research Division Presentation Operator
Previous Statements by TRW
» TRW Automotive Holdings' CEO Discusses Q4 2011 Results - Earnings Call Transcript
» TRW Automotive Holdings Corp. Presents at Deutsche Bank Securities' 2012 Global Auto Industry Conference, Jan-11-2012 10:15 AM
» TRW Automotive Holdings' CEO Discusses Q3 2011 Results - Earnings Call Transcript
Before I turn the call over to John and Joe, there are a few items I'd like to cover. First, today's conference call will include forward-looking statements. These statements are based on the environment as we see it today and therefore, involve risks and uncertainties. I would caution you that our actual results could differ materially from the forward-looking statements made on this call. Please refer to Slide 2 of the presentation for our complete Safe Harbor statement.The Risk Factors section of our 2011 Form 10-K contains additional information about risks and uncertainties that could impact our business. You can access a copy of our 2011 10-K and other SEC filings by visiting the Investors section of our website at trw.com or through the SEC's website at sec.gov. On a related matter, we expect to file the first quarter 10-Q within the next day or so. Once filed, the 10-Q can also be accessed through either website. In addition to the financial results presented on a GAAP basis, we will be discussing non-GAAP information that we believe is useful in evaluating the company's operating performance. Reconciliations for these non-GAAP measures to the closest GAAP equivalent can be found on the conference call materials, which are posted on the Investors section of our website at trw.com. Finally, a replay of this call can be accessed via dial-in or through a webcast on our website. Replay instructions were included in our release this morning. We have not given our permission for any other recording of this call and do not approve or sanction any transcribing of the call. This concludes my comments. I'll now turn the call over to John Plant. John? John C. Plant Thank you, Mark, and good morning, everyone. As you can see from the results posted this morning, TRW has achieved a solid start to 2012 and looks to build on the positive momentum established over the past several quarters.
During the first quarter, sales, which totaled $4.2 billion, were 2% higher compared with the prior-year quarter and marked the highest level achieved for any first quarter. Adjusting for currency and divestitures, sales increased by 5.4%. Operating profit and margin before special items was $333 million and 7.9%, respectively, and tracks in line with our expectations. Net income was $211 million, and earnings per share were $1.62 on the same basis.And finally, also in line with company expectations and normal seasonality, operating cash flow in the quarter was a use of some $102 million. In addition to funding our growth, the company used about $91 million during the quarter to repurchase certain bonds and stock. Joe will discuss these capital structure transactions in more detail in just a few moments. Despite the use of cash in the first quarter, we anticipate 2012 will be another strong year of cash generation for TRW. Overall, the first quarter results demonstrate TRW's strong market position and commitment to protect its profitability, especially in the light of weak industry conditions that exist in Europe. The strength of recovery in North America, which surpassed the expectations of most industry observers established at the beginning of the quarter, has partially offset the year-on-year decline in vehicle sales and production in Europe and also a slower-than-expected start in China. In North America, overall vehicle production was up 16% compared with the first quarter of 2011. On a sequential basis, compared with the fourth quarter of last year, production was up about 14%. The upstream production level of about 3.9 million vehicles in the quarter was the highest quarterly level achieved since before the start of the 2008 recession. The unexpected North American higher production growth presented some challenges, primarily for our supply base, that we expect will moderate as we move through the year. Read the rest of this transcript for free on seekingalpha.com