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Autoliv (ALV) Q2 Loss Narrower Than Expected, Sales Top

Autoliv, Inc. ALV reported second-quarter 2020 adjusted loss of $1.40 cents per share, a penny lower than the Zacks Consensus Estimate. Higher-than-anticipated revenues across both the segments led to narrower-than-expected loss.

However, the company reported earnings of $1.38 per share in the year-ago quarter. Per IHS Markit, global light vehicle production declined around 45% year over year during second-quarter 2020, in turn denting the firm’s earnings and sales.

The company reported net sales of $1,047.6 million in the quarter, down from the prior-year figure of $2,154.7 million. However, the figure beat the Zacks Consensus Estimate of $999 million.

Autoliv reported adjusted operating loss of $171.4 million against adjusted operating income of $183.2 million in the corresponding quarter of 2019. Adjusted operating margin from continuing operations was negative 16.4% in the reported quarter.

Autoliv, Inc. Price, Consensus and EPS Surprise

 

Autoliv, Inc. Price, Consensus and EPS Surprise

Autoliv, Inc. price-consensus-eps-surprise-chart | Autoliv, Inc. Quote

Segmental Performance

Sales in the Airbags and Associated Products segment totaled $653.8 million, surpassing the Zacks Consensus Estimate of $581 million. However, revenues from the segment were down around 54.5% year over year. Inflator revenues declined 75% year over year. Sales declined in all regions served by the company except China.

Sales in the Seatbelts and Associated Products segment totaled $393.8 million, down 45.2% from the prior-year quarter. However, the figure topped the consensus mark of $338 million. Weaker revenues from America, Europe, Japan and Rest of Asia negatively impacted the year over year performance. Nonetheless, seatbelts revenues increased 12% year over year in China during the reported quarter.

Financial Position

Autoliv had cash and cash equivalents of $1,223.2 million as of Jun 30, 2020. Long-term debt was $2,567 million, increasing from $2,209 million as of Mar 31, 2020. Net capital expenditure decreased to $64 million from the year-ago figure of $128 million.

Road Ahead

Global light vehicle production for the year is anticipated to be below 2019 levels, with high volatility in customer call-offs. The company expects to face headwinds in second-half 2020 amid lower inflator sales, and high depreciation and amortization costs. Nonetheless, cost-containment efforts are likely to provide some respite.

Zacks Rank & Key Picks

Autoliv currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the auto sector include Garrett Motion Inc. GTX, Strattec Security Corporation STRT and LCI Industries LCII, each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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