(TRW) TRW Automotive Holdings Plans Investments

TRW Automotive Holdings Corp. (TRW) recently 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.

The company expects to open an occupant safety system and braking facility in Wuhan, China, an aftermarket friction plant in Qingdao, China and a slip control systems and actuation plant in Queretaro, Mexico by next year.

The company has also intended to increase the production at some of its already existing plants, especially in China. It will expand its electrically powered steering and electronics plant in Anting, China, the braking joint venture in Nanjing, China, the occupant safety joint venture in Chengdu, China along with the expansion of its fasteners plant in Ningbo, China.

TRW wants to further emphasize on driver assist systems (DAS) technology and thus has announced related investments in Brest, France and Peterlee, the UK. Further research on steering technology was announced in China, Poland and the UK; while investment on advanced braking systems was announced in Koblenz, Germany.

Alongside, TRW has further decided to develop its radar center of excellence in Brest, France with an aim to launch a 24 GHz radar and develop a new short range radar concept, which will enable 360 degree sensing.

Thus 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 at its technical centers worldwide.

In the last reported quarter, TRW realized adjusted earnings of $264 million or $1.99 per share, up 19.5% from the year-ago quarter adjusted earnings of $221 million or $1.73 per share, 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 in the domestic vehicle manufacturers, rising demand for TRW’s active and passive safety products and favorable currency translation effects.

TRW Automotive is a leading manufacturer of advanced technology products and services for the automotive markets. Headquartered in Michigan, U.S., 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.

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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