- Autoliv Inc ALV shares are down Friday premarket following its mixed bag of first-quarter results amid a challenging operating environment, especially in Europe.
- ALV reported first-quarter FY23 sales growth of 17% year-on-year to $2.49 billion, beating the consensus of $2.31 billion.
- Sales increased organically by 21% due to new product launches and higher prices.
- The adjusted operating margin for the quarter was 5.3% versus 3.2% last year. Adjusted operating income increased 93% to $131 million.
- Return on capital employed contracted to 13%, and the adjusted return on capital employed was 13.4%.
- Gross profit for the quarter increased 32% Y/Y to $379 million with a gross margin of 15.2%, up 160 basis points.
- Net income in the quarter under review plunged 11% to $74 million. Adjusted earnings per share doubled Y/Y to $0.90, missing the estimate of $0.92.
- Operating cash flow decreased from $70 million to negative $(46) million, dragged mainly by adverse working capital effects due to the high sales growth. The company held cash and equivalents of $713 million at the end of the quarter.
- Net debt as of March 31, 2023, amounted to $1.48 billion, up by $420 million than a year earlier.
- "Our market position is strong, and we are investing for increased production with a new textile facility in Vietnam," said CEO Mikael Bratt.
- "Together with our actions for cost reductions and price adjustments, this will give the significant full year profit improvement that we expect."
- Outlook: Autoliv sees FY23 organic sales growth of around 15%.
- The company expects an adjusted operating margin of around 8.5%-9%.
- ALV sees around $900 million in operating cash flow.
- Price Action: ALV shares are trading lower by 4.58% at $87.72 during the premarket session on Friday.
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