Autoliv (ALV) Q4 Earnings Surpass Estimates, Dividend Hiked

Autoliv Inc. ALV reported fourth-quarter 2023 adjusted earnings of $3.74 per share, surpassing the Zacks Consensus Estimate of $3.25 and rising 105% year over year. The company reported net sales of $2,751 million in the quarter, which topped the Zacks Consensus Estimate of $2,746 million and soared 18% year over year.

Organic sales rose 16% year over year and breezed past our estimate of 10.6% due to product launches and higher prices. Autoliv reported an adjusted operating income of $334 million, increasing 43% year over year. Adjusted operating margin was 12.1%, higher than 10% in the year-ago period due to higher gross profit.

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 $1,864 million, beating our projection of $1,789.7 million. Revenues rose 18% on a year-over-year basis. All major categories within the segment witnessed organic sales growth, the primary reason being a rise in sales of steering wheels, followed by inflatable curtains, side airbags and passenger airbags.

Sales in the Seatbelts and Associated Products segment totaled $887 million, up 18% from the prior-year quarter but missing our projection of $905.8 million. Organic growth in the Americas, followed by Asia excluding China, China and Europe, contributed to the year-over-year increase.

Region-wise, overall sales in the Americas during the quarter under review totaled $861 million, which surpassed our estimate of $828.6 million and increased 16% year over year.

Sales in Europe totaled $755 million, topping our forecast of $715 million and increasing 23% year over year.

Sales in China came in at $617 million, missing our projection of $650.7 million but rising 15% year over year.

Sales in the Rest of Asia totaled $519 million, up 18% year over year and above our projection of $500.4 million.

Financial Position

Autoliv had cash and cash equivalents of $498 million as of Dec 31, 2023. Long-term debt totaled $1.32 billion. Net capital expenditure fell to $150 million compared with $165 million during the corresponding period of 2022. At quarter-end, free cash flow was $297 million, flat compared to the year-ago period. During the quarter under review, Autoliv increased its dividend to 68 cents per share, representing an uptick of 3% from the previous quarter. It repurchased 1.51 million shares at an average price of $99.21 per share.

2024 Guidance

The company forecasts full-year 2024 organic sales growth of around 5%. The adjusted operating margin is anticipated to be approximately 10.5%. Operating cash flow is expected to be $1.2 billion in 2024.

Zacks Rank & Key Picks

ALV currently carries a Zacks Rank #3 (Hold).

Some better-ranked players in the auto space are Honda Motor Co., Ltd. HMC, BYD Company Limited BYDDY and Mercedes-Benz Group AG MBGAF. HMC and BYDDY each sports a Zacks Rank #1 (Strong Buy) and MBGAF carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for HMC’s 2024 sales and earnings implies year-over-year growth of 14.8% and 37.3%, respectively. The EPS estimates for 2024 and 2025 have moved up 7 cents and 3 cents, respectively, in the past seven days.

The Zacks Consensus Estimate for BYDDY’s 2023 sales and earnings suggests year-over-year growth of 36.5% and 70.6%, respectively. The EPS estimate for 2024 has improved 30 cents in the past seven days.

The Zacks Consensus Estimate for MBGAF’s 2023 sales suggests year-over-year growth of 5.8%. The EPS estimates for 2023 and 2024 have improved by a penny and 30 cents, respectively, in the past 60 days.

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