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Revenue: Approximately $2.7 billion, a 4% year-over-year increase.
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Gross Margin: Increased by 30 basis points to 18.5%.
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Operating Income: Adjusted operating income increased by 14% to $251 million.
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Operating Margin: Adjusted operating margin improved by 80 basis points to 9.3%.
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Earnings Per Share (EPS): Record EPS for the second quarter, increased by $0.33.
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Cash Flow: Operating cash flow was $277 million.
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Free Operating Cash Flow: $163 million, compared to $194 million in the prior year.
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Dividend: Increased to $0.85 per share for the third quarter.
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Share Repurchases: $51 million spent, retiring 0.5 million shares.
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Debt Leverage Ratio: Remained strong at 1.3 times.
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Sales Growth: Second quarter sales increased by 4% year-over-year.
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Organic Sales Growth: More than 3%, including tariff cost compensations.
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Tariff Recovery: Approximately 80% of tariff costs recovered during the second quarter.
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Return on Capital Employed: Adjusted return was 24%.
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Return on Equity: Adjusted return was 28%.
Release Date: July 18, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Autoliv Inc (NYSE:ALV) reported record sales and earnings for the second quarter of 2025, highlighting the company’s resilience and strong market position.
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The company significantly improved its operating profit and operating margin compared to the previous year, driven by efficiency improvements and cost management.
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Autoliv Inc (NYSE:ALV) successfully recovered approximately 80% of the tariff costs incurred during the second quarter and expects to recover most of the remaining portion later this year.
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The company achieved record earnings per share for the second quarter, more than tripling its earnings per share over the past five years.
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Autoliv Inc (NYSE:ALV) increased its third-quarter dividend to $0.85 per share, reflecting confidence in its continued financial strength and long-term value creation.
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The company remains cautious about the rest of the year due to complexities of tariffs and other challenging economic factors.
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Autoliv Inc (NYSE:ALV) experienced an unfavorable regional and customer mix, which partly offset its sales growth.
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The combination of not yet recovered tariffs and the dilutive effect of the recovered portion resulted in a negative impact of approximately 35 basis points on the operating margin.
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Operating cash flow decreased by $63 million compared to the same period last year, primarily due to higher receivables.
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The global light vehicle production outlook for the second half of 2025 has weakened, with production expected to decline by more than 2%.
Q: How is Autoliv’s performance in China progressing, and do you expect to continue outpacing the market? A: Mikael Bratt, President and CEO, explained that Autoliv is closing the gap with Chinese OEMs, and they expect to outperform the market in China by the end of the year, driven by recent product launches and improved sales growth.
Q: Why was only 80% of tariff costs recovered in Q2, and do you expect full recovery by year-end? A: Mikael Bratt noted that the 80% recovery was due to timing effects, with negotiations still ongoing at the quarter’s end. They are confident that the remaining costs will be recovered by the end of the year.
Q: What are the main drivers for the expected weakest Q3 in terms of margins? A: Fredrik Westin, CFO, stated that the expected drop in global light vehicle production by 1 million units in Q3 is the main driver. This aligns with typical seasonality, where Q3 is usually the weakest quarter.
Q: How is Autoliv managing pricing dynamics amid ongoing tariff negotiations? A: Mikael Bratt mentioned that while they continue tariff-related price negotiations, they also manage inflationary impacts and new product pricing. The historical expectation of a 2% to 4% price reduction on running programs remains unchanged.
Q: How does Autoliv’s market share and growth in India look for 2025? A: Fredrik Westin highlighted that Autoliv has significantly outperformed the underlying light vehicle production growth in India, holding around 60% market share. India is expected to contribute approximately 5% to group sales in 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.