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Autoliv Inc ALV

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Autoliv Q3 Results Hit by Chip Shortage, Reduces 2021 Outlook; Slight FVE Increase to $94

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

Narrow-moat Autoliv, supplier of air bags, seat belts, and steering wheels to the global auto industry, reported third-quarter earnings per share before special items of $0.73, missing the $0.82 FactSet consensus EPS by $0.09 and $0.75 below $1.48 reported last year. While the microchip shortage, which caused sporadic customer production changes, and higher raw material costs contributed to the year-over-year decline, we were impressed with a 25% decremental margin performance. Revenue declined 9% versus the year-ago period, to $1.8 billion due to customers’ call-offs on the chip crunch. Excluding the positive currency effect, organic revenue was down 12%, outperforming a 20% drop in global light-vehicle production by 8 percentage points on a strong new business launch schedule that continues in the fourth quarter.

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Company Profile

Business Description

Autoliv is the global leader in passive safety components and systems for the auto industry. Products include seat belts, frontal air bags, side-impact air bags, air bag inflators, and steering wheels. The Renault-Nissan-Mitsubishi alliance is the company's largest customer at 13% of 2020 revenue, with Volkswagen and Stellantis accounting for 11% each. At 31% of 2020 revenue, the Americas was Autoliv's largest geographic region, followed by Europe at 28%, China at 21%, and Japan at 10%.

Klarabergsviadukten 70, Box 70381, Section B7
Stockholm, SE-107 24, Sweden
T +46 858720600
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 62,000