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Autoliv (ALV) Q3 Earnings Beat Estimates, '20 View Bleak

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Autoliv, Inc. (ALV - Free Report) reported third-quarter 2020 adjusted earnings of $1.48 per share, which topped the Zacks Consensus Estimate of $1.27. Higher-than-anticipated revenues from both the segments led to the outperformance. The bottom line was also higher than $1.30 per share recorded in the year-ago quarter. Robust demand of Autoliv’s products and cost-cut efforts resulted in improved year-over-year performance

The company reported net sales of $2,037 million for the quarter, up from the prior-year figure of $2,028 million. Moreover, the figure beat the Zacks Consensus Estimate of $1,982 million.

Autoliv reported adjusted operating income of $206 million, up 12.5% year over year. Adjusted operating margin from continuing operations was 10.1% for the reported quarter, higher than 9% in the corresponding period of 2019.

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 $1,331.6 million, surpassing the Zacks Consensus Estimate of $1,181 million. However, revenues were a tad lower than the year-ago level of $1,349.3 million. Inflator revenues declined 58% year over year.

Sales in the Seatbelts and Associated Products segment totaled $705.6 million, up 4% from the prior-year quarter. Further, the figure topped the consensus mark of $660 million. Higher revenues from North America, China and Japan aided the results.

Financial Position

Autoliv had cash and cash equivalents of $1,476.5 million as of Sep 30, 2020. Long-term debt totaled $2,007.1 million, increasing from $1,815.1 million as of Sep 30, 2019. Net capital expenditure decreased to $76.4 million from the year-ago figure of $122.3 million.

Road Ahead

Per IHS Markit, global light vehicle production slipped 24% for January through September 2020. Global light vehicle production for the fourth quarter is also anticipated to be below the corresponding period of 2019. As such, Autoliv expects net sales to decline 14.5% year over year in 2020. Adjusted operating margin is expected to be 6%. Operating cash flow for 2020 is forecast to decline from 2019.

Zacks Rank & Other Key Picks

Autoliv currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks from the auto space include Lear Corporation (LEA - Free Report) , LCI Industries (LCII - Free Report) and BRP Inc (DOOO - Free Report) , each flaunting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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