Autoliv Q2 Earnings Call Highlights

Autoliv posted a record second quarter for sales and adjusted operating income, with net sales up 3% to $2.8 billion and adjusted operating margin improving to 9.6%. Adjusted diluted EPS rose to $2.43, and the company also generated stronger cash flow. Asia drove the company’s outperformance , especially China and India, where Autoliv beat local light vehicle production by wide margins. The company also signed strategic cooperation agreements with Great Wall Motor and XPENG to deepen ties with Chinese automakers. Autoliv kept its full-year guidance unchanged despite softer vehicle production expectations and a $110 million raw material headwind. It still expects roughly flat organic sales, adjusted operating margin of 10.5% to 11%, and about $1.2 billion in operating cash flow. Five stocks we like better than Autoliv . Smart Money Is Buying Auto Suppliers, Not Car Brands Autoliv NYSE: ALV reported what executives described as a record second quarter for sales and adjusted operating income, while maintaining its full-year outlook despite weaker global vehicle production expectations, raw material headwinds and geopolitical uncertainty. President and Chief Executive Officer Mikael Bratt said the automotive safety supplier delivered “a record second quarter, both for sales and adjusted operating income,” citing strong customer partnerships, cost efficiency efforts and growth in Asia. He said the company navigated tariffs, supply chain disruptions and raw material volatility during the quarter. Get Autoliv alerts: Sign Up 3 Stocks With Major Buyback Power: AI & Auto in Focus Chief Financial Officer Monika Grama said second-quarter net sales were $2.8 billion, up 3% from the prior-year period. Adjusted operating income rose to $270 million from $251 million, and adjusted operating margin increased to 9.6% from 9.3%. Adjusted diluted earnings per share rose by $0.23 to $2.43, helped by higher operating income and a lower diluted share count, partly offset by higher taxes. The company said reported operating income was $192 million, which was $78 million below adjusted operating income, mainly due to capacity alignment activities. Gross profit increased by $8 million, while gross margin declined 30 basis points, reflecting a supplier compensation reversal and asset impairments related to restructuring activity. Asia Drives Sales Outperformance Xpeng Nails Excellent Results on 62% Sales Growth with Margins Autoliv said organic sales grew 1% in the quarter, including a negative impact from tariff-related compensation. Based on S&P Global light vehicle production data, the company outperformed the global market by more than one percentage point. Bratt highlighted particularly strong performance in Asia. In China, Autoliv outperformed light vehicle production by more than seven percentage points, supported by sales growth with Chinese automakers. Chinese OEMs accounted for 55% of Autoliv’s China sales in the quarter, up from 40% a year earlier. Bratt said the company’s sales to Chinese OEMs outperformed by more than 40 percentage points. In India, Autoliv’s organic sales grew 36%, which Bratt attributed mainly to increased safety content in vehicles. The company said it outperformed India light vehicle production by about 20 percentage points. Asia excluding China outperformed the market by six percentage points, with Japan and South Korea also contributing. Autoliv also announced strategic cooperation agreements with Great Wall Motor and XPENG. Bratt said the agreements support the company’s strategy to expand with leading Chinese vehicle manufacturers and create a platform for longer-term growth as those automakers expand globally. Turkey Closure Part of EMEA Cost Reduction Plan Autoliv detailed additional structural cost actions in Europe, the Middle East and Africa, including a plan to g...