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Autoliv (ALV) Misses on Q2 Earnings, Lowers '21 Sales View

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Autoliv, Inc. ALV reported second-quarter 2021 adjusted earnings of $1.20 per share, which missed the Zacks Consensus Estimate of $1.44. Lower-than-anticipated revenues from the Airbags and Associated Products segment led to the underperformance. While the bottom line declined 33% from first-quarter 2021, it turned around from a loss of $1.40 per share incurred in the year-ago period. Higher demand for Autoliv’s products and cost-cut efforts resulted in improved year-over-year performance.

The company reported net sales of $2,022 million for the quarter, significantly up from the prior-year figure of $1,048 million. However, the figure fell short of the Zacks Consensus Estimate of $2,133 million.

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 Highlights

Sales in the Airbags and Associated Products segment totaled $1,310 million, lagging the consensus mark of $1,504 million. However, revenues doubled from the year-ago level of $654 million. While knee airbags and steering wheels witnessed the highest sales growth rate on a year-over-year basis, demand for passenger airbags, driver airbags, side airbags and inflatable curtains also rose sharply.

Sales in the Seatbelts and Associated Products segment totaled $712 million, surging 80.7% from the prior-year quarter. Further, the figure topped the consensus mark of $666 million. Higher revenues primarily from Europe and America aided the results.

Financial & Other Updates

Autoliv had cash and cash equivalents of $893 million as of Jun 31, 2021. Long-term debt totaled $1,712 million, decreasing from $2,039 million as of Mar 31, 2021. Net capital expenditure increased to $96 million from the year-ago figure of $64 million. At quarter-end, free cash flow was negative $33 million.

During the quarter under review, Autoliv reinstated quarterly payout. The board declared a quarterly dividend of 62 cents per share for second-quarter 2021. Amid heightening climate concerns, the company announced that its operations would become carbon neutral by 2030. In fact, Autoliv targets zero emissions across the supply chain by 2040.

Revised Guidance

Amid supply-chain uncertainty due to chip crunch, Autoliv has lowered full-year 2021 forecasts. It expects full-year 2021 net sales to rise 20-22% year over year versus the prior guidance of 23% growth. Adjusted operating margin is expected within 9-9.5%, down from previous view of 10%. Meanwhile, operating cash flow for 2021 is envisioned to be on par with 2020 levels.

Autoliv — which shares space with Magna MGA, Meritor MTOR and BorgWarner BWA — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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