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Autoliv (ALV) Q2 Earnings Top, Operating Margin View Raised

·4 min read

Autoliv Inc. ALV reported second-quarter 2022 adjusted earnings of 90 cents per share, topping the Zacks Consensus Estimate of 46 cents. The upside stemmed from higher-than-expected revenues from the Americas. The bottom line fell 25% on a yearly basis. The company reported net sales of $2,081 million in the quarter, which missed the Zacks Consensus Estimate of $2,180 million. The top line, however, inched up 2.9% year over year.

Autoliv reported an adjusted operating income of $124 million, falling 25% year over year. Adjusted operating margin from continuing operations was 6%, lower than 8.2% in the year-ago period. The business was affected by higher cost of raw materials, increased freight and transportation costs and lower than expected light vehicle production.

Autoliv, Inc. Price, Consensus and EPS Surprise

Autoliv, Inc. Price, Consensus and EPS Surprise
Autoliv, Inc. Price, Consensus and EPS Surprise

Autoliv, Inc. price-consensus-eps-surprise-chart | Autoliv, Inc. Quote

Segmental Performance

Sales in the Airbags and Associated Products segment totaled $1,336 million, missing the Zacks Consensus Estimate of $1,478 million. Revenues inched up 1.9% on a year-over-year basis. All major categories within the segment witnessed sales growth on a yearly basis. The primary reason for the upside was steering wheels and inflatable curtains, followed by passenger airbags and side airbags.

Sales in the Seatbelts and Associated Products segment totaled $746 million, up from $712 recorded in the prior-year quarter. The figure, however, missed the consensus mark of $811 million. Organic growth in the Americas and Europe was offset by a decline in China.

Region-wise, overall sales in the Americas during the quarter under review totaled $738 million, which beat the consensus mark of $681 million. Sales in Europe totaled $611 million, falling short of the Zacks Consensus Estimate of $628 million. Sales in China, Japan and the Rest of Asia came in at $363 million, $142 million and $227 million, missing the consensus mark of $535 million, $208 million and $242 million, respectively.

Financial Position

Autoliv had cash and cash equivalents of $327 million as of Jun 30, 2022, down 63% year over year. Long-term debt totaled $1,060 million, decreasing from $1,712 million as of Jun 30, 2021. Net capital expenditure increased 44% to $139 million. At quarter-end, free cash flow was negative $190 million, deteriorating from negative $33 million in the year-ago period. During the quarter under review, Autoliv paid a quarterly dividend of 64 cents per share and repurchased 0.30 million shares.

2022 Guidance

The company forecasts full-year 2022 organic sales growth in the range of 13-16%, up from 12-17% guided previously. Adjusted operating margin is now anticipated within 6-7%, up from the prior forecast of 5.5-7%. Operating cash flow expectations remain unchanged in the band of $750-$850 million.

Zacks Rank & Other Key Picks

Autoliv currently carries a Zacks Rank #2 (Buy). A few other top-ranked players in the auto space include Garrett Motion GTX and Commercial Vehicle Group CVGI. Both these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Switzerland-based Garrett designs, manufactures, and sells turbocharger and electric-boosting technologies. The Zacks Consensus Estimate for GTX’s 2022 earnings and sales implies year-over-year growth of 6.7% and 1.8%, respectively. The consensus mark for 2022 earnings has been revised upward by 5 cents in the past 60 days. Over the trailing four quarters, Garrett surpassed earnings estimates twice for as many misses, the average being 75.4%.

Ohio-based Commercial Vehicle Group supplies interior systems, vision safety solutions and other cab-related products for the global commercial vehicle market, including the heavy-duty (Class 8) truck market, the construction market and other specialized transportation markets. The Zacks Consensus Estimate for CVGI’s 2022 earnings and sales implies year-over-year growth of 6.2% and 2.6%, respectively. The consensus mark for 2022 earnings has been revised upward by 10 cents in the past 30 days.


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