Autoliv Inc. ALV reported first-quarter 2023 adjusted earnings of 90 cents per share, beating the Zacks Consensus Estimate of 87 cents. Higher-than-expected revenues from the Airbags and Associated Products segment led to the outperformance. Smart pricing strategies to offset commodity cost woes aided profits. The bottom line also shot up 99% on a year-over-year basis. The company reported net sales of $2,493 million in the quarter, which topped the Zacks Consensus Estimate of $2,283 million and soared 17% year over year. Organic sales rose 21% year over year and breezed past the consensus mark of 6.27%.
Autoliv reported an adjusted operating income of $131 million, which surged 93% year over year. Adjusted operating margin from continuing operations was 5.3%, higher than 3.2% in the year-ago period. It was achieved through extensive customer discussions that were initiated in early 2022 and resulted in price increases to offset high raw material cost inflation. Cost containment efforts and organic sales growth also aided margins.
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 $1,673 million, beating the Zacks Consensus Estimate of $1,407 million. Revenues rose 21% on a year-over-year basis. All major categories within the segment witnessed organic sales growth. The primary reason for the upside was a rise in sales of inflatable curtains and steering wheels, followed by side airbags and passenger airbags.
Sales in the Seatbelts and Associated Products segment totaled $820 million, up 10% from the prior-year quarter. Organic growth in Europe, followed by Asia (excluding China) and America was the contributing factor. The figure, however, missed the consensus mark of $1,084 million.
Region-wise, overall sales in the Americas during the quarter under review totaled $831 million, which surpassed the consensus mark of $709 million and increased 20% year over year. Sales in Europe totaled $725 million, topping the Zacks Consensus Estimate of $630 million and surging 26% year over year. Sales in China came in at $453 million, surpassing the consensus mark of $357 million and up 1.2% year over year. Sales in the Rest of Asia totaled $483 million, up 18% year over year and above the Zacks Consensus Estimate of $438 million.
Financial Position
Autoliv had cash and cash equivalents of $713 million as of Mar 31, 2023, down 24% year over year. Long-term debt totaled $1601 million, increasing from $1,054 million as of Dec 31, 2022. Net capital expenditure jumped to $143 million, compared with $17 million during the corresponding period of 2022. At quarter-end, free cash flow was negative $189 million against $53 million in the year-ago period. During the quarter under review, Autoliv paid dividends of 66 cents per share and repurchased 0.45 million shares at an average price of $92.19 per share.
2023 Guidance Reaffirmed
The company forecasts full-year 2023 organic sales growth of around 15%. Adjusted operating margin is anticipated within the 8.5-9% range. Operating cash flow is expected to be $900 million for 2023.
Zacks Rank & Key Picks
Autoliv currently carries a Zacks Rank #2 (Buy).
A few top-ranked players in the auto space are Geely Automobile Holdings Limited GELYY, BYD Company Limited BYDDY and Ferrari N.V. RACE, all of which sport a Zacks Rank #1 (Strong Buy) at present.
Geely is engaged in automobile manufacturing and related areas. The Zacks Consensus Estimate for GELYY’s 2023 sales and earnings implies year-over-year growth of 57.5% and 7.4%, respectively.
BYD is engaged in the research, development, manufacture and distribution of automobiles, secondary rechargeable batteries, and mobile phone components. The Zacks Consensus Estimate for BYDDY’s 2023 and 2024 sales implies year-over-year growth of 175% and 26.2%, respectively.
Ferrari is engaged in designing, manufacturing and selling sports cars. The Zacks Consensus Estimate for RACE’s 2023 sales and earnings implies year-over-year growth of 14% and 19.8%, respectively.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Autoliv, Inc. (ALV) : Free Stock Analysis Report
Geely Automobile Holdings Ltd. (GELYY) : Free Stock Analysis Report
Ferrari N.V. (RACE) : Free Stock Analysis Report
Byd Co., Ltd. (BYDDY) : Free Stock Analysis Report