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Autoliv (ALV) Q2 Earnings Drive Past Estimates, Rise Y/Y

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Autoliv (ALV) Q2 Earnings Drive Past Estimates, Rise Y/Y

Organic sales growth across China, India, ASEAN and South America aids Autoliv (ALV) to beat earnings estimates in the second quarter. However, revenues miss estimates.

Autoliv, Inc. ALV reported adjusted earnings of $2.22 per share in second-quarter 2018, beating the Zacks Consensus Estimate of $1.88. Moreover, the bottom line improved from the prior-year quarter’s $1.50.

During the quarter under review, Autoliv reported net sales of $2.21 billion, reflecting an increase of 11.5% year over year. The top line missed the Zacks Consensus Estimate of $2.3 billion. Quarterly organic sales grew 7.3%, with major geographic organic growth across China, India, ASEAN and South America.

Operating income from continuing operations gained 4.2% to $229 million. However, adjusted operating margin from continuing operations was 10.4% in the reported quarter, lower than the prior-year quarter’s figure of 11.1%.

Autoliv, Inc. Price, Consensus and EPS Surprise

 

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

On Jun 29, 2018, Autoliv completed the spin-off of its Electronics business into Veoneer, Inc. After the completion of the spin-off, the company is focused on occupant safety products. The total cost of separation in 2017 and 2018, including tax effects, amounted to roughly $105 million, against the company’s expectation of $150 million.

Financial Position

Autoliv had cash and cash equivalents of $507.5 million as of Jun 30, 2018, lower than $922.5 million reported as of Jun 30, 2017. Long-term debt was $1.68 billion as of Jun 30, 2018, witnessing an increase from $1.31 billion as of Jun 30, 2017.

In the first half of 2018, the company’s cash flow from operations was $63 million compared with the year-ago figure of $329 million. Business segment separating costs and increased operating working capital has resulted in this decline. Net capital expenditure increased to $304 million from the year-ago figure of $260 million.

Guidance

For 2018, Autoliv anticipates a consolidated sales increase of around 10%, with organic sales growth for continuing operations to be around 8% combined with a positive currency translation of approximately 2%. Further, the projected operating cash flow for continuing operations is expected to be on a similar level to 2017, which was $870 million.

Zacks Rank & Other Key Picks

Autoliv currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the auto space are Fox Factory Holding Corporation FOXF, AB Volvo VLVLY and Oshkosh Corporation OSK, each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fox Factory has an expected long-term growth rate of 15.8%. Over a year, shares of the company have gained 27.9%.

Volvo has an expected long-term growth rate of 15%. Over a year, shares of the company have gained 2.4%.

Oshkosh has an expected long-term growth rate of 18.3%. Shares of the company have risen 9.3% in the past year.

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