Autoliv's earnings per share improved 8.3% to $1.43 in the first
quarter, beating the Zacks Consensus Estimate of $1.42. Revenues
increased 7.5% to $2.3 billion, in line with the Zacks Consensus
Estimate. Autoliv expects organic sales growth of about 5% and
operating margin of around 9% in 2014. Although the company
benefits from a strong balance sheet and innovative products, there
are concerns stemming from stiff competition and high dependence on
just a few customers. Moreover, low vehicle production in Europe
and Brazil could weigh on the company's performance. As a result,
we are maintaining a Neutral recommendation.
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
Airbags products accounted for about 64.7% of revenues in the
first quarter of 2014, while seatbelts products and active safety
products contributed 30.6% and 4.7%, 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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