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Autoliv (ALV) Q1 Earnings Miss Estimates, Sales Down Y/Y

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Autoliv Inc. (ALV - Free Report) reported first-quarter 2022 adjusted earnings of 45 cents per share, lagging the Zacks Consensus Estimate of $1.29. The downside stemmed from lower-than-expected revenues in both segments. The bottom line fell 75% from $1.79 per share recorded in the year-ago quarter.

The company reported net sales of $2,124 million in the quarter, which missed the Zacks Consensus Estimate of $2,226.7 million. The top line also declined 5.26% from the prior year’s $2,242 million.

Autoliv reported an adjusted operating income of $68 million, steeply falling 71% year over year. Adjusted operating margin from continuing operations was 3.2%, lower than 10.6% in the year-ago period. Business was affected by higher cost of raw materials, increased freight and transportation costs and reduced customer demand.

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 $1,381 million, missing the Zacks Consensus Estimate of $1,432 million. Revenues fell nearly 6% on a year-over-year basis. All major categories within the segment, except the front center airbags, witnessed a sales decline. The primary reason for the decline was side airbags and steering wheels, followed by driver airbags and inflatable curtains.

Sales in the Seatbelts and Associated Products segment totaled $744 million, down 4.6% from the prior-year quarter. The figure also missed the consensus mark of $763 million. Curtailed revenues from mainly America and Europe led to the decline.

Financial Position

Autoliv had cash and cash equivalents of $938 million as of Mar 31, 2022, down 25% year over year from $1,254 million. Long-term debt totaled $1,647 million, decreasing 24% from $2,039 million as of Mar 31, 2021. Net capital expenditure decreased 82% to $17 million from $93 million. At quarter-end, free cash flow was $53 million, spiraling down 43%. During the quarter under review, Autoliv paid a quarterly dividend of 64 cents per share and began share repurchase under the company’s three-year stock repurchase program.

Full-Year 2022 Guidance

Autoliv braces itself for a somewhat challenging year ahead. It expects raw material costs to rise in the current year. However, price increases may offset cost inflation, mainly in the second half of the year. It harps on the previously announced strategies to follow strict cost discipline in 2022, including executing capacity alignments, footprint optimization and strategic initiatives.

The company forecasts full-year 2022 organic sales growth in the range of 12-17% and an adjusted operating margin of 5.5-7%.

Zacks Rank & Key Picks

ALV currently carries a Zacks Rank #5 (Strong Sell).

Better-ranked players in the auto space include BRP Group, Inc. (DOOO - Free Report) , sporting a Zacks Rank #1 (Strong Buy) and CNH Industrial (CNHI - Free Report) and Standard Motor Products (SMP - Free Report) , each carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BRP Group has an expected earnings growth rate of 9.1% for fiscal 2023. The Zacks Consensus Estimate for current-year earnings has been revised around 7.9% upward in the past 60 days.

BRP Group’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. DOOO pulled off a trailing four-quarter earnings surprise of 68%, on average. The stock has declined 16.1% over the past year.

CNH Industrial has an expected earnings growth rate of 1.5% for the current year. The Zacks Consensus Estimate for current-year earnings has remained stable in the past 60 days.

CNH Industrial’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. CNHI pulled off a trailing four-quarter earnings surprise of 63%, on average. The stock has lost 3.8% over the past year.

The Zacks Consensus Estimate for Standard Motor’s current-year earnings has been revised around 0.2% upward in the past 60 days.

Standard Motor’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. SMP pulled off a trailing four-quarter earnings surprise of 60.4%, on average. The stock has declined 0.3% over the past year.