Autoliv Q2 net income drops 13.5%

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Swedish airbag and seat belt supplier Autoliv said its second-quarter net income dropped 13.5 percent from a year earlier because of stagnant North American and Chinese auto production and higher r&d spending.

The company posted second-quarter net income of $ 128.3 million, down from $ 148.4 million a year ago. The company cut its full-year sales growth forecast to 2 percent from 4 percent, Autoliv said on Friday.

During the second quarter, revenue fell 1.3 percent to $ 2.54 billion. The company said airbag inflator sales continue to rise in the wake of the global Takata airbag recall, but those gains were balanced out by stagnating vehicle production in China and North America.

Autoliv also said it increased r&d expenses by 10.8 percent during the quarter.

“Research, Development & Engineering expenses net, in support of our growth strategy, increased by $ 19 million compared to the same quarter in the prior year as we continued to invest in technology competence and capacity,” the report said.

Autoliv said it hired an additional 1,000 engineers in the nine months to the end of March. The company also announced plans to spend $ 22.6 million to consolidate four of its North American operations into one location near Detroit.

CEO Jan Carlson said last month the company hopes to hit a record $ 12 billion in annual revenue in 2019.

“When we look at these more than $ 12 billion, that is absolutely mostly based on the order book we have,” he told Reuters in an interview in June.

Autoliv, of Stockholm, ranks No. 23 on the Automotive News list of the top 100 global suppliers with worldwide parts sales to automakers of $ 10.07 billion in 2016.

Katie Buda contributed to this report.

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