(ALV) Autoliv, Inc. – Quarterly Loss Much Less Than Forecasted

September 24th, 2009

Autoliv, Inc.’s (ALV) sales dipped lower in the shaky economy of the last year, but analysts are bullish on the company’s longer-term prospects, with the next-year estimate projecting bullish earnings growth and a return to profitability.

Company Description

Autoliv, Inc., through its subsidiaries, develops and manufactures automotive safety systems to the automotive industry. Its products include such items as airbag systems, child seats and night vision systems. The company was founded in 1956 and has a market cap of $3.05 billion.

Shares of ALV have posted big gains over the last 6 months, helped by the company’s better than expected second-quarter results, reported on July 21.

Second-Quarter Results

Sales were down 37% from last year, but earnings came in better than expected at a loss of 14 cents against the Zacks Consensus Estimate calling for a loss of 36 cents.

The results may seem a bit under whelming, but the longer term picture looks better as the company recovers from the volatile environment of the last 12 months.

Estimates and Guidance

Autoliv said it expects sales to improve in the 3rd quarter to a decline of 20%-25%, with analysts projecting a return to profitability, targeting earnings of 22 cents per share. Even further out, the next-year estimate is bullish, pegged at $1.67, a massive improvement from this year’s numbers.

Valuation

Based on the next-year estimate, when the company is projected to return to profitability, this stock is trading with a P/E of 21X, a premium to the overall market.

The Chart

Shares of ALV have been rallying with the market since early March and recently hit a new 52-week high. Take a look below.

Zacks Investment Research
View original at: Zacks.com News Feed

More on this topic (What's this?)
The Automakers Can't Win: Hybrid Cars Sales Also Plummet (Wealth Daily, 3/18/09)
China Passing U.S. as World's Largest Auto Market (Money Morning, 2/5/09)
Autoliv (ADR) Earnings Estimate $ALV (Robert Weinstein Trading Blog, 10/24/11)
China Passing U.S. as World’s Largest Auto Market (Money Morning, 2/5/09)
Read more on Autoliv, Auto Makers at Wikinvest

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