Autoliv ALV reported first-quarter 2026 adjusted earnings of $2.05 per share, which declined 4.7% year over year but came ahead of the Zacks Consensus Estimate of $1.77 by 15.8%.
Net sales were $2.75 billion, up 6.8% from the year-ago quarter and above the Zacks Consensus Estimate of $2.63 billion by 4.52%. Management highlighted strong progress in Asia, while organic sales rose 0.8% even as global light vehicle production declined 3.4%.
Autoliv also pointed to strategic progress outside its traditional core business. During the quarter, the company introduced its first airbag for motorcycles and a wearable airbag solution for riders, and it announced new motorcycle-related safety collaborations.
Autoliv, Inc. Price, Consensus and EPS Surprise
Autoliv, Inc. price-consensus-eps-surprise-chart | Autoliv, Inc. Quote
ALV Outperforms Auto Production on Regional Mix
Autoliv’s organic sales growth of 0.8% was helped by product launches, with regional and customer mix estimated to have contributed about 1.5 percentage points and tariff compensations adding around 0.5 percentage points.
By region, its performance diverged. Asia, excluding China, delivered 11.1% organic growth, and China grew 4.9%, while EMEA declined 1.8% and the Americas fell 5.2% on an organic basis.
The company noted outperformance versus light vehicle production in China and Asia, excluding China, supported by improved presence with Chinese OEMs and strong growth in India tied to rising safety content per vehicle.
ALV Product Sales Rise Led by Airbags and Steering Wheels
On a product basis, Airbags, Steering Wheels and Other sales were $1.86 billion, up 6.3% year over year, while Seatbelt Products and Other sales reached $890 million, increasing 7.8%. Organic growth was modest in both groups, with 0.7% for the airbags-related business and 1.1% for seatbelts and related products.
Within Airbags, Steering Wheels and Other, the quarter’s largest contributors to organic gains included center airbags, driver airbags and side airbags, partly offset by declines in passenger airbags and inflatable curtains. For Seatbelt Products and Other, Autoliv cited organic sales increases in Asia excluding China, EMEA and China, with declines in the Americas.
ALV Gross Profit Improves as Costs and FX Shape Margins
Despite the sales lift, profitability showed mixed movement year over year. Gross profit increased 10% to $526 million and gross margin improved 0.6 percentage points to 19.1%, helped by positive foreign exchange effects, improved operational efficiency and higher sales, partly offset by higher tariff costs, net.
Operating income declined 6.7% to $237 million, and adjusted operating income decreased 3.9% to $245 million. Operating margin was 8.6% and adjusted operating margin was 8.9%, down from 9.9% on both measures in the prior-year quarter.
Autoliv Expenses Rise as Operating Income Softens
Cost items moved higher in key areas. SG&A rose to $161 million from $145 million, with the company citing negative FX translation effects and higher personnel costs. Research, development and engineering expense (net) increased to $120 million from $95 million, reflecting lower engineering income tied to timing effects, higher personnel costs and negative FX translation.
Below the operating line, financial and non-operating items (net) were a negative $35 million compared with a negative $22 million a year earlier, driven by higher non-operating costs related mainly to restructuring in the Americas. Net income declined to $142 million from $167 million.
ALV Cash Flow Negative on Working Capital Build
Cash generation weakened in the quarter. Operating cash flow was negative $76 million versus positive $77 million a year earlier, primarily reflecting a larger working capital build. Autoliv attributed the working capital increase to strong sales in March, temporary effects expected to reverse later in the year and the high level of accounts payable at the end of 2025.
Capital expenditure, net, was $84 million, down from $93 million a year ago. Free operating cash flow was negative $159 million compared with negative $16 million in the prior-year quarter.
Autoliv Balance Sheet & Dividends
Autoliv ended the quarter with cash and cash equivalents of $342 million, compared with $322 million a year earlier. Long-term debt was $1.7 billion, compared with $1.56 billion a year ago.
Shareholder returns continued through dividends. Autoliv paid a cash dividend of 87 cents per share in the quarter, with dividends paid totaling $65 million.
ALV’s 2026 Outlook Amid Tariff and Geopolitical Risks
For full-year 2026, Autoliv expects no organic sales growth, around 10.5-11% adjusted operating margin and roughly $1.2 billion of operating cash flow. The company also expects around a 3% positive FX impact on net sales.
Management emphasized that conditions remain fluid, given geopolitical developments and tariff uncertainty. Autoliv said it achieved customer compensations for more than 70% of tariff costs in the first quarter, though tariffs still had a negative impact on operating margin.
ALV stock currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases of Peers
Lear Corporation LEA is slated to release first-quarter 2026 results on May 1. The Zacks Consensus Estimate for Lear’s to-be-reported quarter’s earnings and revenues is pegged at $3.30 per share and $5.87 billion, respectively. LEA surpassed earnings estimates in each of the trailing four quarters, with the average surprise being 14.26%. The company has a Zacks Rank #3 (Hold) at present.
Magna International MGA is slated to release first-quarter 2026 results on May 1. The Zacks Consensus Estimate for Magna’s to-be-reported quarter’s earnings and revenues is pegged at $1.03 per share and $10.1 billion, respectively. MGA surpassed earnings estimates in three of the trailing four quarters and missed on the other, with the average surprise being 8.85%. The company sports a Zacks Rank #1 at present.
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