Autoliv (ALV) Q3 Earnings Miss Estimates, 2018 View Cut

Autoliv, Inc. ALV reported adjusted earnings of $1.35 per share in third-quarter 2018, missing the Zacks Consensus Estimate of $1.58. Moreover, the bottom line declined from the prior-year quarter’s tally of $1.47.

During the quarter under review, Autoliv reported net sales from continuing operations of $2.03 billion, reflecting a 4.1% rise year over year. While the Zacks Consensus Estimate for the same was pegged at $2.07 billion. Quarterly organic sales grew 6.4%, majorly driven by a 22% organic sales increase in Americas. However, this uptrend was partly offset by weak demand for light vehicle production in China and Europe.

Operating income from continuing operations gained 15.1% to $193 million. Adjusted operating margin from continuing operations was 9.5% in the reported quarter, higher than the prior-year quarter’s figure of 8.6%.

Autoliv, Inc. Price, Consensus and EPS Surprise

Autoliv, Inc. Price, Consensus and EPS Surprise | Autoliv, Inc. Quote

Financial Position

Autoliv had cash and cash equivalents of $534 million as of Sep 30, 2018, lower than $958 million reported as of Sep 30, 2017. Long-term debt was $1.68 billion as of Sep 30, 2018, witnessing a rise from $1.31 billion as of Sep 30, 2017.

At the end of third-quarter 2018, the company’s operating cash flow increased to $238 million compared with the year-ago figure of $218 million. Net capital expenditure decreased to $117 million from the year-ago figure of $142 million.

Guidance

For 2018, Autoliv anticipates organic sales growth for continuing operations to be around 6%. Combined with a positive currency translation of approximately 2%, the company expects a consolidated sales boost of approximately 8%. The previous anticipated figure was 10%, which included the effect of currency conversion. Further, the adjusted operating margin for continuing operations is projected to be around 10.5% compared with the prior guidance of 11%.

Zacks Rank and Stocks to Consider

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

A few better-ranked stocks in the auto space are Allison Transmission Holdings, Inc. ALSN, CarMax, Inc. KMX and Advance Auto Parts, Inc. AAP. While Allison Transmission sports a Zacks Rank #1 (Strong Buy), both CarMax and Advance Auto carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 10%. Over the past six months, shares of the company have rallied 12.7%.

CarMax has an expected long-term growth rate of 3.3%. Over the past six months, shares of the company have climbed 12.1%.

Advance Auto has an expected long-term growth rate of 12.3%. Shares of the company have soared 43.8% over the past six months.

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