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TRW sees 3Q shortfall
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September 7, 2000: 11:18 p.m. ET
Defense and auto products maker cites Ford cutbacks, weaker space biz
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NEW YORK (CNNfn) - TRW Inc. warned Thursday that its third-quarter earnings would fall up to 23 percent below analysts' expectations in part because of the Firestone tire recall.
After Thursday's closing bell, the Cleveland-based supplier of automotive, aerospace and information-technology products said it now expects to earn between 81 cents and 85 cents per share during the period ending Sept. 30.
Analysts polled by earnings tracker First Call had expected TRW to turn a profit of $1.05 per share during the quarter.
TRW, which produces airbags, antilock brake and traction-control systems, said cutbacks at three Ford (F: Research, Estimates) production facilities were in part to blame for the earnings shortfall. Ford has shut down production at three facilities for two weeks in order to free up replacement tires.
The company also cited weakening currency exchange rates, higher expense levels and higher investments in its technology bank initiatives as well as lower revenues from its space and electronics business.
TRW (TRW: Research, Estimates) shares fell 59 cents to finish New York Stock Exchange trading at $45.25 per share prior to the announcement. They fell another $5.59, or 12 percent, to $40.25 in after-hours trading.
 A TRW spokesman declined to elaborate on the reasons given for the unexpected shortfalls, but said the currency weakness and Ford cutbacks are affecting all auto suppliers.
The company said the cited issues may have a continuing impact on the fourth quarter as well. Even so, the company said it is on track to achieve its previously announced cash-flow goal of reducing net debt by approximately $300 million in the second half of 2000.
Additionally, TRW said it will record after-tax charges of $36 million related to a reorganization of its automotive air-bag operations. The company also will record a $14 million charge against earnings related to a product recall that took place in 1999 involving parts it supplied for commercial truck steering systems.
TRW is expected to report its third quarter 2000 results on October 18. 
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TRW
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