Autoliv Inc. (ALV) recently launched a forward-looking Mono Vision Sensing System for BMW models. This new technology will improve driver awareness, in turn reducing the chances of traffic accidents, injuries and even fatalities for automobiles.
For this product, Autoliv is the system integrator and provides the complete system of hardware including the camera and the electronic control unit, thus launching its first camera-based Vision Systems. With the growing demand for Advanced Driver Assistance Systems, this product by Autoliv is expected to raise sales of the company.
Autoliv, based in Stockholm, Sweden, operates through two principal subsidiaries: Sweden-based Autoliv AB (AAB) and Indiana-based Autoliv ASP (ASP). The company manufactures occupant restraint systems for automobiles and has a product portfolio consisting primarily of safety airbags, seat belts and steering wheels.
The Swedish corporation, AAB, develops, manufactures and supplies automotive safety systems to the automotive industry such as seatbelts, seatbelts pretensioners, frontal airbags, side-impact airbags, steering wheels and seat sub-systems. The Indiana corporation, ASP, designs, develops and manufactures airbag modules, inflators, airbag cushions, seatbelts and steering wheels.
Autoliv released its 2011 second quarter results on July 21, 2011. The company’s net income was almost unchanged at $146 million, however earnings per share declined 4% year over year to $1.54. Consolidated sales improved 14% to $2.06 billion, reflecting an upside of 9% due to currency translation effect.
The company is expected to witness improvement going forward given its near-term plans. Autoliv has continuously expanded in low-cost countries, including Romania and China, to meet local demand and consolidate manufacturing from high-cost countries. These have helped the company to reduce costs and fight competition from other big manufacturers of automobile protection products.
Autoliv expects consolidated sales to grow by 16% for the third quarter of 2011, backed by an organic sales growth of 9%. Operating margin is expected to cross 11% during the upcoming quarter.
Moreover, the company’s cash position has improved to $559.7 million as of June 30, 2011 from $459.4 million in the year-ago period, implying further scope for potential investments. Besides, long-term debt declined to $487.9 million as of June 30, 2011 from $708.8 million in the prior-year quarter.
However, the company is highly exposed to customer concentration risk. The company’s top three original equipment manufacturer (OEM) customers are Ford Motor Co. (F), Renault-Nissan and General Motors Company (GM), who account for 18%, 12% and 11% of total sales, respectively.
The company is also expected to face some short-term supply constraints from Japan due to the natural disaster in March, 2011. As a result, the shares of Autoliv Inc. are maintaining a Zacks #3 Rank, which translates into a short-term Hold rating.
AUTOLIV INC (ALV): Free Stock Analysis Report
FORD MOTOR CO (F): Free Stock Analysis Report
GENERAL MOTORS (GM): Free Stock Analysis Report
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment