TRW Holdings (NYSE: TRW) recorded a 29% jump in its second-quarter profits, helped by higher vehicle production in the quarter. This increase in vehicle production prompted the Michigan-based auto parts maker to boost its annual outlook.

Auto parts makers have seen improving sales as auto manufacturing has rebounded. North America's largest auto parts maker, Magna International (NYSE: MGA), saw its sales jump by 24% in its most recent quarter. Advance Auto Parts (NYSE: AAP) recently saw its revenues increase and its profits rose 12%. Here's what you need to know about TRW's quarter.

A look at the numbers
Revenues for the quarter increased 16% to $4.23 billion due to higher production of vehicles in the U.S. that increased demand for the safety products TRW manufactures. Favorable foreign exchange gains also helped sales for the quarter.

Higher raw material costs resulted in a slight decline in gross margin. A 17% increase in selling, general and administrative expenses (SG&A) resulted in the operational efficiency of the company declining a bit. Operating margin stood at 8.6% as compared to 9% last year.

Higher SG&A and input costs could not offset the gain in revenues, though. Thus, TRW's profits rose to $293 million, from $227.0 million, up 29% from the past year.

A look at the books
Free cash flow declined to $171.0 million from $340.0 million a year ago because TRW is working on building or expanding 11 manufacturing plants. It has also been reducing its debt load. Over the last year, TRW's total debt declined to $1.65 billion, from $1.99 billion. A far cry from when the industry was on the ropes a few years back, TRW's interest coverage ratio of 12.1 times indicates the company is comfortably positioned to pay off its short-term obligations.

The Foolish bottom line
Spurred on by the quick recovery in Japan, PricewaterhouseCoopers' automotive industry analysis unit recently raised its auto production outlook for the year to 75.9 million units. This increase in vehicular production should help TRW take its strong performance forward. To stay up to speed with what TRW is up to -- click here to add it to your stock Watchlist.