2nd UPDATE: TRW Swings To 2Q Loss; Beats Analyst Estimates

TRW Automotive Holdings Corp. (TRW), one of the world's largest maker of safety parts, swung to a second-quarter loss but raised its full-year revenue forecast amid signs of a stabilization in demand.

The company posted a loss of $11 million, or 11 cents a share, compared with a profit of $127 million, or $1.24 a share a year earlier. Sales decreased 38.6% to $2.7 billion

However, TRW joined a growing list of auto parts makers that are beginning to see firmer financial footing after making drastic job cuts over the past year. TRW's loss narrowed compared to the first quarter when the company reported a loss of $131 million.

Shares jumped more than 18% in early trading Tuesday.

"The restructuring and cost containment actions implemented over the previous three quarters had a significant impact," TRW Chief Executive John Plant said in a statement on Tuesday. "Finalizing the agreement with our lenders to protect our liquidity, in addition to our cost containment actions, should allow us to manage through the downturn."

TRW announced in June it had finalized a deal with its lenders to amend its $2.5-billion credit agreement. The company sought the changes in response to the slumping demand in the industry.

Other companies reporting slowing earnings erosion and beating analyst estimates were Goodyear Tire & Rubber Co. (GT), Federal-Mogul Corp. (FDML) and Tenneco Inc. (TEN).

They are among the handful of major suppliers that have avoided filing for bankruptcy protection. In the past three months alone, Visteon Corp. (VSTN), Metaldyne Corp., Lear Corp. (LEAR) and Cooper-Standard Automotive Inc. have all sought Chapter 11.

Excluding special items, TRW reported a second-quarter profit of 8 cents a share, beating the average analyst estimate of a loss of 83 cents, according to a survey by Thomson Reuters.

Auto parts makers could find some additional relief through the "Cash for Clunkers" program heading into the second half of the year. The enthusiastic response is depleting new car inventory which will likely cause auto makers to increase their production plans.

The annualized U.S. selling rate for July jumped to 11.2 million vehicles after trailing between 9.3 million and 9.6 million for the first six months of the year.

Dealers around the country have said they are running low on products produced by General Motors Co. and Chrysler Group LLC. Both companies scaled back production during their bankruptcies earlier this year.

"We remain optimistic the first half of 2009 was the trough in global automotive production for the current downturn," Plant said. "Vehicle production forecasts are indicating higher levels of production for the remainder of 2009 and into 2010."

TRW raised its full-year revenue forecast to a range of $10.5 billion to $10.9 billion, from $10.1 billion to $10.5 billion. It expects third-quarter sales to be about $2.8 billion.

-By Jeff Bennett, Dow Jones Newswires; [e-mail]; 248-204-5542