From Ford (M) to Nio (NIO), automakers around the world are trying to make cars safer as well as electric and high-tech cars.
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Autoliv (ALV) underpins this common goal. The Swedish supplier of security products and systems to many global automakers said on Friday earnings per share more than doubled in the second quarter, after doubling in the first quarter. Autoliv’s stock soared.
Autoliv No. 1 Automotive Safety Provider
Autoliv, the world’s largest maker of airbags and seat belts, says it benefits from higher vehicle safety standards and tougher regulations.
Other factors driving its markets include “the premium vehicle trend and growing emphasis on safety in emerging markets,” the company said in its 2022 annual report.
In China, Autoliv customers include EV startups Nio, Li-Auto (LI) and XPeng (XPEV). Its customers also include Ford and General Engines (GM) in the United States, and volkswagen (VWAGY) in Europe. Autoliv supplies, for example, the Nio ES6 SUV and the Ford Lightning truck, both new high-end electric vehicles.
The global transition to electric vehicles continues to accelerate. Autoliv also manufactures safety products for electric vehicles, such as battery cut-off switches.
Autoliv Earnings
In the second quarter, Autoliv’s revenue jumped 27% to $2.635 billion, it said on Friday. Earnings rose 115% per share to $1.93, smashing estimates of $1.41, according to FactSet. This marked an acceleration in growth from a 17% revenue gain and a 100% increase in profits in the first quarter.
The company tied second-quarter gains to new product launches, higher prices and cost cuts. “We achieved the price offsets from customers that we had anticipated,” the earnings release said.
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Autoliv Stock, Ford, Nio
In stock action on Friday, Autoliv stock jumped 10.2% in high volume to 102.77. Shares hit a 52-week high at 103.99 intraday. The move marked a gap break above a buy point at 98. The breakout gap rules place the buy point at 99.68.
Nio also rose on Friday, while Ford stock fell a fraction.
Cost inflation
On Friday, Autoliv reiterated its guidance for the full year after beating estimates.
In 2022, the car safety products maker’s revenue fell 12% due to chip shortages and Covid-19 lockdowns in China. Analysts expect a 48% rebound in profits for the year 2023, according to FactSet.
Ongoing challenges include cost inflation related to raw materials, labor and logistics.
Year-to-date, ALV stock is up 34.2%.
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