Earnings
Autoliv's third-quarter earnings slip as China sales fall, and it steers its 2026 margin goal to the low end of its range
The airbag and seatbelt maker kept its organic sales and cash flow targets but now sees an adjusted operating margin of about 10.5% as raw material costs bite.
HedgeWeekly News Desk ·
Autoliv reported third-quarter adjusted diluted earnings of $2.19 a share on Friday, down 5.7% from a year earlier, as net sales eased 0.5% to $2.69 billion. Operating income fell 5% to $254 million, and the adjusted operating margin narrowed to 9.7% from 10.0%.
Organic sales fell 1.1%, a smaller decline than the 1.9% drop in global light vehicle production. China was the weakest region, with organic sales down 5.8%, although sales to Chinese carmakers rose about 21% and now make up 58% of Autoliv's China business. Organic sales in Asia excluding China grew 8.8%, helped by a 29% rise in India, while the Americas and the Europe, Middle East and Africa region each fell 2.9%.
For 2026 the company now expects an adjusted operating margin of around 10.5%, the bottom of its earlier 10.5% to 11% range. It left its targets of roughly flat organic sales and about $1.2 billion of operating cash flow unchanged. Autoliv bought back 1.23 million shares for $150 million during the quarter and paid $63 million in dividends.
Why it matters: Autoliv's numbers show costs that rarely make headlines squeezing auto suppliers. Raw materials were a gross headwind of about $42 million in the quarter, and the company expects about $120 million for the full year. It said it passed more than 80% of tariff costs on to customers, leaving a net hit of about $6 million. It also cut its estimate for China vehicle output this year to a 6.9% decline, from 4.0% in July. Investors will be watching whether the stronger fourth quarter Autoliv expects from new launches and raw material recoveries arrives before its investor day in Shanghai on April 26-27, 2027.