Autoliv reported third-quarter 2014 adjusted earnings of $1.25 per
share, down 4.6% year over year. The earnings missed the Zacks
Consensus Estimate of $1.40 per share. Consolidated revenues rose
4.2% year over year to $2.21 billion, missing the Zacks Consensus
Estimate of $2.27 billion. The weakness was due to unfavorable
vehicle mix and decline in vehicle production in China. Autoliv
expects organic sales growth of about 5.5% and operating margin of
around 9% in 2014. While the planned change in operating structure
is expected to enhance growth and company benefits, backed by a
strong balance sheet and innovative product launches, we are
concerned about stiff competition and high dependence on a few
customers. Moreover, low vehicle production in some regions could
weigh on the company's performance. As a result, we maintain a
Autoliv Inc. (ALV), based in Stockholm, Sweden, is a holding
company that operates through two principal subsidiaries: Autoliv
AB (AAB) and Autoliv ASP (ASP). The company manufactures occupant
restraint systems for automobiles and has a product portfolio
consisting primarily of safety airbags, seat belts and steering
The Swedish corporation, AAB, develops, manufactures and
supplies automotive safety systems to the automotive industry.
These include seatbelts, seatbelt pretensioners, frontal airbags,
side-impact airbags, steering wheels and seat sub-systems. The
Indiana Corporation, ASP, designs, develops and manufactures airbag
modules, inflators, airbag cushions, seatbelts and steering
Airbag products accounted for about 64.5% of revenues in the
first nine months of 2014, while seatbelt products and active
safety products contributed 30.4% and 5.1%, respectively. Most
major automobile manufacturers in the world are served by Autoliv.
It segregates results geographically into Europe, Americas, China,
Japan, and the Rest of the World.
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