TRW Inc. lost $110.3 million on revenue of $1.46 billion in the third quarter, the result of $170 million in write-downs and reserves taken on both continuing and discontinued operations, the Cleveland-based firm said.
Separately, the company said it will buy back $622 million of common stock tendered by shareholders in an offer announced last month. The buy-back of 7.6 million shares represents 20.8% of the firm’s outstanding common shares.
Although TRW’s earnings report was colored by red ink because of the extraordinary items, the firm was adversely affected in the third quarter. It said third-quarter earnings from continuing operations slumped to $31.9 million from $70.6 million in the same quarter last year, a decline of 54.8%.
TRW said it established a $140-million reserve fund in the third quarter to cover anticipated future losses in two operating groups that it is currently attempting to sell. Those operations are the firm’s aircraft components group and industrial products group. A spokesman said the firm is now in negotiations to sell those units to unidentified parties.
TRW also took write-downs of $22 million in its energy-related products and services and $8 million in write-downs at its Redondo Beach-based Electronics & Space Systems segment.
Operating profit at the firm’s Redondo Beach unit was $72 million before the write-down, compared to $84 million last year. The write-down lowered earnings this year to $63 million.