Why Autoliv Shares Are Gaining Today

Autoliv Inc ALV reported second-quarter FY23 sales growth of 27% year-on-year to $2.63 billion, beating the analyst consensus of $2.54 billion.

Adjusted operating margin for the quarter was 8% versus 6% last year. Adjusted operating income increased 71% to $212 million.

Return on capital employed expanded to compressed 360 basis points to 9.5%. 

Gross profit for the quarter increased 37% Y/Y to $447 million with a gross margin of 16.9%.

"Last week, we announced the first step towards the necessary optimization of our cost structure to the market environment," said President and CEO Mikael Bratt.

"This first step is expected to reduce costs by around $25 million in 2024, increasing to around $55 million in 2025 and to reach around $75 million when fully completed."

Adjusted EPS of $1.93 beat the analyst consensus of $1.43.

Operating cash flow totaled $379 million for the quarter. The company held cash and equivalents of $475 million at the end of the second quarter.

Net debt at the end of the second quarter amounted to $1.29 billion.

Outlook: Autoliv continues to see FY23 organic sales growth of around 15%, adjusted operating margin of around 8.5%-9%, and $900 million in operating cash flow.

Price Action: ALV shares are trading higher by 7.43% at $100.20 during the pre-market session on Friday.