Autoliv second-profit rises 4% despite raw material, pricing headwinds
STOCKHOLM — Autoliv, the world’s largest maker of airbags and seatbelts, reported higher second-quarter operating earnings but forecast lower than expected organic sales growth for 2018.
In its maiden report since spinning off its electronics business Veoneer on June 29, Autoliv said its operating profit rose 4.2 percent to $ 229 million. Operating margins, however, fell to 10.4 percent from 11.1 percent from the same quarter last year.
Net income fell 71 percent to $ 37.2 million, mostly reflected by a one-time charge of $ 159 million for discontinued operations.
Revenue gained 11.5 percent to $ 2.21 billion during the quarter.
Autoliv said headwinds from raw material pricing and currency movements limited the positive effects from the strong sales growth in the quarter.
The Swedish supplier, which rivals Joyson Safety Systems and ZF TRW, forecast 2018 like-for-like sales growth of around 8 percent.
CEO Mikael Bratt said the outlook cut was “entirely related” to underlying car production forecasts, with several things currently impacting the market, including new emissions standards in Europe and the threat of trade wars.
“We carefully monitor the development of issues fundamental to our business such as possible NAFTA renegotiations and various trade barriers on raw materials and automotive products,” Autoliv said in its statement.
The company has been winning a lot of new business in recent years at the expense of collapsed Japanese rival Takata, which has been at the center of the auto industry’s biggest-ever recall and filed for bankruptcy last year.
Takata was bought by Key Safety Systems earlier this year, and the joint company was renamed Joyson Safety Systems.
As it can often take as much as two years before orders translate into sales, Autoliv is only recently starting to see the impact of the new business it has won.
Autoliv, prior to the spinoff, ranked No. 24 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $ 10.40 billion.
Automotive News contributed to this report.
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