Seatbelt and airbag maker Autoliv has reported a near doubling in fourth-quarter profit, thanks to strong demand for its products despite a slight decline in vehicle production in key markets, according to a Dow Jones Newswires report.
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Despite expectations that automotive production will be flat in Western Europe, North America and Japan this quarter, Autoliv reportedly said its sales for the first three months of 2004 should grow by more than 15% on last year and its operating margin slightly exceed 7.2%.
According to Dow Jones, Autoliv said its fourth quarter net profit rose 93% year-on-year to $91.7 million, or $0.96 a share, to top consensus analyst expectations of $ 0.81 a share – sales for the period increased 25% to $1.48 billion from $1.18 billion in 2002.
Light vehicle production during the fourth quarter, while somewhat stronger that expected, was down 1% in Autoliv’s key markets, the company reportedly said. It added that Volkswagen commenced production of its new Golf, Ford of its new C-max, Volvo of its new 40-series and BMW of its new 5-series – each of which uses Autoliv components, Dow Jones added.
Autoliv reportedly said sales in Europe rose 30% – a mix of currency effects and organic growth as most vehicle makers added its Inflatable Curtain [airbag] safety feature to newly launched car models. The rise, it added, was also the result of market share gains, Dow Jones said.
The report said sales in North America rose a more modest 4% in the quarter, driven by a 31% increase in seat belts, while sales in Japan doubled, primarily due to the acquisition of a car parts maker and market share gains in frontal airbags.
One Nordic analyst told Dow Jones that Autoliv’s quarterly results were well above expectations across the board, with the company’s organic growth particularly impressive. The analyst reportedly added that, as Autoliv is traditionally cautious in its first-quarter outlook, the company is likely to top its own guidance and achieve an operating margin well above 7.2%.
Another analyst told Dow Jones he was impressed by Autoliv’s strong cash flow – $US237 million in cash generated by its operations compared with $150 million in the same quarter of 2002 – which he attributes to Autoliv’s focus on research and development.
Autoliv said it would pay a quarterly dividend of 15 cents a share, Dow Jones added.
