TRW Comments On Expected Third Quarter Results
8 September 2000
TRW Comments On Expected Third Quarter Results
Business EditorsCLEVELAND--Sept. 7, 2000--TRW Inc. announced today that it expects third quarter earnings per share to be below current consensus estimates of $1.05 per share.
The shortfall is primarily the result of a further weakening of foreign currencies, production cutbacks announced by Ford, weaker than expected revenues from the company's space and electronics business, increased investments in technology bank initiatives, and a higher level of interest expense. As a result, earnings per share are expected to be reduced by approximately $0.19 to $0.24 in the third quarter. These issues may have a continuing impact on the fourth quarter.
Despite the anticipated earnings shortfall, the company believes it will achieve its previously announced cash flow goal of reducing net debt by approximately $300 million in the second half of 2000.
During the third quarter TRW will also recognize after-tax charges relating to the following events:
| - | Consolidation of air bag operations -- TRW's occupant safety systems business will consolidate two inflator propellant manufacturing operations into one site in order to optimize operating efficiencies. As a result, a charge of approximately $36 million, primarily non-cash, will be recognized in the third quarter. |
| - | Product recall and inventory adjustments -- In July a commercial truck recall was issued involving approximately 200,000 parts that were improperly heat treated by TRW's commercial steering systems business during a 12-week period of 1999. In addition, adjustments relating to inventory and operating systems at two automotive manufacturing facilities have been identified. These issues will result in approximately $14 million of charges in the third quarter. |
TRW will report its third quarter 2000 results on October 18, 2000.