UPDATE 1-Autoliv shaves outlook due to Europe's weak car market
STOCKHOLM Oct 23 (Reuters) - Car safety equipment maker Autoliv trimmed its profit and sales forecasts on Tuesday after a bigger-than-expected drop in third quarter e a rnings that showed the impact of Europe's weak car market and a slowdown in China.
Autoliv , the world's biggest maker of seatbelts and airbags, said it was suffering from a worsening situation in European car production as well as slower than expected growth in China. That was partly due to political tension between Japan and China which has led to boycotts of Japanese vehicle manufacturers in China.
"Due to the uncertain market conditions in Europe, it is still unclear how long the holiday shutdowns will be this year among the vehicle manufacturers. Consequently, our sales and margin guidance is more uncertain than usual," it said.
Third quarter pretax profit was $175 million, compared with the $182 million forecast in a Reuters poll and $193 million in the same period last year.
Autoliv said in Europe, which makes up about 30 percent of its sales, LVP (light vehicle production) is estimated to be down by 6 percent compared to the third quarter in 2011. In Western Europe, LVP decreased by 8 percent and in Eastern Europe by 1 percent, it said.
It expected organic sales to grow in the range of 0-2 percent in the fourth quarter and for the operating profit margin to be around 9 percent.
For the full year, Autoliv expected organic sales growth of 4.5 percent, which excludes factors like currency swings and acquisitions, and an operating profit margin of more than 9.5 percent, below forecasts made in July of 6 percent in sales and about 10 percent in profitability.
By 1031 GMT, Autoliv shares were down 6 percent at 386.7 crowns.
"It is mainly the guidance for the fourth quarter which is creating uncertainty," said Handelsbank Capital Markets analyst Hampus Engellau.
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