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Autoliv, Inc. (ALV - Free Report) reported adjusted earnings of $1.65 per share in the first quarter of 2017 that beat the Zacks Consensus Estimate of $1.52. However, earnings decreased 0.6% from $1.66 per share reported a year ago. Earnings per share, on a reported basis, amounted to $1.62 in the first quarter of 2017 compared with $1.51 in the year-ago quarter.
Autoliv reported record consolidated quarter revenues of $2.61 billion, up 7.3% year over year, and beat the Zacks Consensus Estimate of $2.58 billion. Excluding negative currency translation effects and the impact of acquisitions, organic sales improved 4.4%, exceeding the company’s expectation of more than 3%.
Operating income increased 6% to $217.6 million (or 8.3% of sales) from $205.2 million (or 8.4% of sales) in the year-ago quarter. Adjusted operating margin was 8.4% in the reported quarter, higher than the company’s expectation of around 8%.
Shares of the company fell around 6.1% to close at $100.19 on Apr 28 on the company’s lower year-over-year adjusted earnings and expected decline in second-quarter revenues.
Sales at the Passive Safety segment rose 2.6% year over year to $2.04 billion in the reported quarter. Excluding negative currency translation effects, organic sales increased 4.7%. The segment’s operating income rose 7% to $204.9 million (10% of sales) from $191.5 million (9.6% of sales) in the prior-year quarter. Operating margins were strengthened due to higher sales and lower costs, partly offset by higher expenditure on research and development as well as other costs to support growth.
Sales at the Electronics segment grew 27.8% year over year to $583.3 million. Organic sales were up 2.9%. The Autoliv-Nissin Brake Systems (ANBS) joint venture impacted sales positively. Operating income from the division rose 15.3% to $13.6 million (2.3% of sales) from $11.8 million (2.6% of sales) in the prior-year quarter. Margins were negatively affected due to higher expenditure on research and development as well as long-term development plans.
Financial Position
Autoliv had cash and cash equivalents of $1.24 billion as of Mar 31, 2017, higher than the $1.16 billion reported as of Mar 31, 2016. Long-term debt was $1.32 billion as of Mar 31, 2017, down from $1.5 billion as of Mar 31, 2016.
In first-quarter 2017, the company’s cash flow from operations decreased to $149.2 million from the year-ago figure of $200.5 million. Net capital expenditures rose to $121.4 million from the year-ago recorded figure of $91.2 million.
Dividend
On Feb 20, 2017, Autoliv declared a quarterly dividend of 60 cents per share for the second quarter of 2017, up 2 cents from the previous level. The dividend will be paid on Jun 1, to shareholders on record as of May 17, 2017.
Guidance
Autoliv expects organic sales to grow by around 2% year over year in the second quarter of 2017. Currency translations are expected to have a negative impact of about 3% on sales. This impact is likely to result in consolidated sales decline of 1%. The adjusted operating margin in the second quarter is expected to be around 8.5%.
Autoliv still expects full-year 2017 organic sales to increase around 4%. The recent acquisitions and currency translation are expected have an adverse impact of less than 1% on sales. Based on these factors, consolidated sales are expected to rise around 3%. Adjusted operating margin, excluding costs for capacity alignments and antitrust related matters, is still likely to be 8.5% in 2017.
Tax rate for full-year 2017 is likely to be around 30%, down from 32% expected previously. Operating cash flows are anticipated to be about or more than $0.8 billion, excluding any discrete items, while capital expenditure for supporting the company’s growth plans are still projected to be in the range of 5–6% of sales.
Since 2015, Autoliv has signed various agreements with original equipment manufacturers to supply replacement airbag inflators. The company expects the deliveries to be above 30 million units over the 2015–2018 period.
Price Performance
Autoliv has underperformed the Zacks categorized Auto/Truck-Original Equipment industry over a year. During this period, the company’s shares lost 4.5%, while the industry saw a 3.3% increase.
Zacks Rank and Key Picks
Currently, Autoliv carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the auto space include Allison Transmission Holdings, Inc. (ALSN - Free Report) , Volkswagen AG and Tata Motors Ltd .
Volkswagen, a Zacks Rank #2 (Buy) stock, has a long-term expected growth rate of 16.8%.
Tata Motors has a long-term expected growth rate of 27.9% and also carries a Zacks Rank #2.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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Autoliv (ALV) Q1 Earnings Beat, FY17 Guidance Unchanged
Autoliv, Inc. (ALV - Free Report) reported adjusted earnings of $1.65 per share in the first quarter of 2017 that beat the Zacks Consensus Estimate of $1.52. However, earnings decreased 0.6% from $1.66 per share reported a year ago. Earnings per share, on a reported basis, amounted to $1.62 in the first quarter of 2017 compared with $1.51 in the year-ago quarter.
Autoliv reported record consolidated quarter revenues of $2.61 billion, up 7.3% year over year, and beat the Zacks Consensus Estimate of $2.58 billion. Excluding negative currency translation effects and the impact of acquisitions, organic sales improved 4.4%, exceeding the company’s expectation of more than 3%.
Operating income increased 6% to $217.6 million (or 8.3% of sales) from $205.2 million (or 8.4% of sales) in the year-ago quarter. Adjusted operating margin was 8.4% in the reported quarter, higher than the company’s expectation of around 8%.
Shares of the company fell around 6.1% to close at $100.19 on Apr 28 on the company’s lower year-over-year adjusted earnings and expected decline in second-quarter revenues.
Autoliv, Inc. Price, Consensus and EPS Surprise
Autoliv, Inc. Price, Consensus and EPS Surprise | Autoliv, Inc. Quote
Segment Results
Sales at the Passive Safety segment rose 2.6% year over year to $2.04 billion in the reported quarter. Excluding negative currency translation effects, organic sales increased 4.7%. The segment’s operating income rose 7% to $204.9 million (10% of sales) from $191.5 million (9.6% of sales) in the prior-year quarter. Operating margins were strengthened due to higher sales and lower costs, partly offset by higher expenditure on research and development as well as other costs to support growth.
Sales at the Electronics segment grew 27.8% year over year to $583.3 million. Organic sales were up 2.9%. The Autoliv-Nissin Brake Systems (ANBS) joint venture impacted sales positively. Operating income from the division rose 15.3% to $13.6 million (2.3% of sales) from $11.8 million (2.6% of sales) in the prior-year quarter. Margins were negatively affected due to higher expenditure on research and development as well as long-term development plans.
Financial Position
Autoliv had cash and cash equivalents of $1.24 billion as of Mar 31, 2017, higher than the $1.16 billion reported as of Mar 31, 2016. Long-term debt was $1.32 billion as of Mar 31, 2017, down from $1.5 billion as of Mar 31, 2016.
In first-quarter 2017, the company’s cash flow from operations decreased to $149.2 million from the year-ago figure of $200.5 million. Net capital expenditures rose to $121.4 million from the year-ago recorded figure of $91.2 million.
Dividend
On Feb 20, 2017, Autoliv declared a quarterly dividend of 60 cents per share for the second quarter of 2017, up 2 cents from the previous level. The dividend will be paid on Jun 1, to shareholders on record as of May 17, 2017.
Guidance
Autoliv expects organic sales to grow by around 2% year over year in the second quarter of 2017. Currency translations are expected to have a negative impact of about 3% on sales. This impact is likely to result in consolidated sales decline of 1%. The adjusted operating margin in the second quarter is expected to be around 8.5%.
Autoliv still expects full-year 2017 organic sales to increase around 4%. The recent acquisitions and currency translation are expected have an adverse impact of less than 1% on sales. Based on these factors, consolidated sales are expected to rise around 3%. Adjusted operating margin, excluding costs for capacity alignments and antitrust related matters, is still likely to be 8.5% in 2017.
Tax rate for full-year 2017 is likely to be around 30%, down from 32% expected previously. Operating cash flows are anticipated to be about or more than $0.8 billion, excluding any discrete items, while capital expenditure for supporting the company’s growth plans are still projected to be in the range of 5–6% of sales.
Since 2015, Autoliv has signed various agreements with original equipment manufacturers to supply replacement airbag inflators. The company expects the deliveries to be above 30 million units over the 2015–2018 period.
Price Performance
Autoliv has underperformed the Zacks categorized Auto/Truck-Original Equipment industry over a year. During this period, the company’s shares lost 4.5%, while the industry saw a 3.3% increase.
Zacks Rank and Key Picks
Currently, Autoliv carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the auto space include Allison Transmission Holdings, Inc. (ALSN - Free Report) , Volkswagen AG and Tata Motors Ltd .
Allison Transmission has long-term expected growth rate of 11% and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Volkswagen, a Zacks Rank #2 (Buy) stock, has a long-term expected growth rate of 16.8%.
Tata Motors has a long-term expected growth rate of 27.9% and also carries a Zacks Rank #2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think. See This Ticker Free >>