UPDATE 3-Autoliv raises sales guidance after solid third quarter profit

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STOCKHOLM, Oct 20 (Reuters) - Autoliv , the world's largest producer of car airbags and seatbelts, raised its annual sales guidance after meeting third-quarter profit expectations on Friday.

CEO Mikael Bratt said the company would increase its 2023 sales guidance to about 17% organic growth from 15%, citing development of light vehicle production (LVP), to which it is highly exposed.

"LVP has developed better than expected, even with the UAW strike in the U.S. We have continued to see an improvement of supply chain stability throughout the year," Bratt said.

The CEO noted, however, that the improvement was slower than expected with a deterioration in Europe in the third quarter.

Autoliv shares rose 3% following its earnings report.

Despite unusually high cost inflation that has squeezed Autoliv and other car industry suppliers in recent years, the Swedish company has managed to pass on a large amount of the costs to its customers.

It also launched a cost-cutting programme earlier this year, including closing down some plants and cutting 8,000 jobs, which is also expected to help the company's results later on.

The stabilisation of raw material prices and the increased availability of semiconductors has meant that LVP has also slowly started to recover.

The company said that it expects its adjusted operating margin to rise by around 1.5-2 percentage points in the fourth quarter from a year earlier.

Autoliv's operating profit rose to $232 million in the third quarter, from $171 million a year earlier.

Adjusted for restructuring, litigation and other non-recurring costs, it was $243 million, in line with analyst estimates of $242 million. (Reporting by Marie Mannes; editing by Louise Rasmussen, Jason Neely and Susan Fenton)