Autoliv’s (ALV) results fell short of consensus estimates in the third quarter. The automotive safety supplier’s revenues declined by 1.6% year-over-year to $2.55 billion, compared to Street estimates of $2.5 billion.
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However, the company’s adjusted earnings grew by 11% year-over-year to $1.84 per share. Still, this fell short of analysts’ expectations of $1.92 per share.
ALV’s CEO Comments on Q3 Results
The company’s management stated that production of light vehicles was lower in the third quarter and declined by 5% globally. However, Autoliv’s global growth still outpaced light vehicle production (LVP) by 4%, thanks to strong performances in Europe and Asia (excluding China), where growth remained more limited.
The company’s President and CEO, Mikael Bratt, commented, “We were able to achieve these results mainly due to our cost control, including a continued reduction of our indirect workforce. We accelerated our efficiency improvements, contributing to a reduction of direct headcount by 3,100 compared to a year earlier, which is a reduction of 6%.”
ALV Issues FY24 Outlook
Considering this scenario and the fact that ALV’s profits are closely tied to LVP, the company lowered its FY24 sales growth forecast to 1%, down from the previously expected 2%. Additionally, ALV expects its adjusted operating margin to be in the range of 9.5% to 10%.
Is ALV a Good Stock to Buy?
Analysts remain cautiously optimistic about ALV stock, with a Moderate Buy consensus rating based on 10 Buys and six Holds. Over the past year, ALV has increased by more than 8%, and the average ALV price target of $118.29 implies an upside potential of 20.2% from current levels. These analyst ratings are likely to change following ALV’s results today.
