STOCKHOLM (Reuters) -Autoliv, the world’s largest maker of airbags and seatbelts, on Friday reported third-quarter profit in line with expectations, although it lowered its sales forecast as its growth outstripped global light vehicle production (LVP).
Supply chain issues, a slowdown in electric vehicle (EV) demand and high costs have weighed on the auto industry.
As a result, LVP on which Autoliv’s profits depend has declined, raising challenges for future sales.
Organic sales declined 0.8% in the quarter and Autoliv cut its organic growth forecast for the full year to 1% from the earlier expected 2%.
The Sweden-listed shares were up 8.45% at 1137 GMT.
Handelsbanken analyst Hampus Engellau said the market had feared weaker results given profit warnings from the auto industry.
“Additionally they have speeded up cost measures significantly in Q3,” he said of Autoliv.
Operating profit adjusted for litigation and other non-recurring costs fell to $237 million from a year-earlier $243 million. Analysts had on average forecast an adjusted operating profit of $238 million, according to a poll posted by Autoliv.
Autoliv said its growth exceeded LVP by 4 percentage points in the quarter on a global basis following substantial outperformance in Europe and Asia but excluding China.
Citing a seasonally strong fourth quarter, the company maintained its guidance for around 9.5-10% adjusted operating margin for 2024, but said it expected to be at the low end of the range.
“We were able to achieve these results mainly due to our cost control, including a continued reduction of our indirect workforce,” CEO Mikael Bratt said.
Following high inflation, Bratt said raw materials had stabilised.
“The impact from raw material price changes in the quarter was close to zero, a very different picture compared to just a few quarters ago,” Bratt told Reuters in an interview.
Autoliv, and other auto suppliers, have been able to pass on most of the higher prices to customers, which for Autoliv include Volkswagen, Stellantis and Toyota.
(Reporting by Elviira Luoma, additonal reporting by Marie Mannes and Jagoda Darlak, editing by Anna Ringstrom and Barbara Lewis)
