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Autoliv Inc. Reports Operating Results (10-Q)

July 20, 2012 | About:

Autoliv Inc. (NYSE:ALV) filed Quarterly Report for the period ended 2012-06-30.

Autoliv Inc.(adr) has a market cap of $5.15 billion; its shares were traded at around $55.45 with a P/E ratio of 9.3 and P/S ratio of 0.6. The dividend yield of Autoliv Inc.(adr) stocks is 3.5%. Autoliv Inc.(adr) had an annual average earning growth of 5.7% over the past 10 years.

Highlight of Business Operations:

Consolidated sales increased slightly more than 1% to $2,089 million. Excluding negative currency effects of 6% and a small divestiture, organic sales (non-U.S. GAAP measure, see reconciliation table above) increased by slightly less than 8% compared to an expected increase of approximately 7%.

Sales of airbag products (including steering wheels and passive safety electronics) increased by 1% to $1,371 million compared to the same quarter in 2011. Negative currency effects reduced sales by a little more than 5%. Organic sales (non-U.S. GAAP measure, see reconciliation table above) of airbag products grew by nearly 7%, which was 4 pp. less than the increase in global LVP. This was due to the negative LVP mix with West European LVP dropping while Japanese LVP rebounding from the tsunami. Sales of airbag products were driven by strong demand for curtain airbags. Sales of knee airbags grew particularly fast due to their further integration into more vehicle models.

Operating income amounted to $190 million and operating margin to 9.1% compared to $205 million and 10.0%, respectively, in the same quarter of 2011. The declines were due to $9 million higher Research, Development and Engineering (R,D&E) expense, net and $4 million higher capacity alignment costs than in the second quarter of 2011. R,D&E expense, net increased to 6.1% of sales from 5.7%, while Selling, General and Administrative (S,G&A) expense declined to 4.5% from 4.6% of sales. The capacity alignment costs, which amounted to $5 million, and legal costs related to the antitrust investigations, which amounted to less than $1 million, had a combined negative margin effect of 0.3 pp.

For the years first six months, consolidated sales increased by slightly more than 2% to $4,268 million compared to the same period 2011. Currency effects had a negative impact of nearly 4%. The organic sales (non-U.S. GAAP measure, see reconciliation table above) increase of slightly more than 6% was 3 pp. less than the increase in global LVP. This temporary underperformance is due to the rebound effect from last years tsunami in Japan, which this year primarily boosts sales of Autolivs Japanese competitors.

Gross profit amounted to $863 million and gross margin to 20.2% compared to $888 million and 21.3%, respectively, in the first six months of 2011. These declines were primarily due to higher raw material prices and new manufacturing capacity not yet fully utilized.

Read the The complete Report

About the author:

Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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