STOCKHOLM Autoliv, the world's biggest maker of car safety equipment like seatbelts and airbags, was slightly more optimistic about core 2013 sales growth and stuck to its profitability goal after China helped compensate for a drastic European downturn.
Autoliv, (ALV.N) (ALIVsdb.ST) a supplier to all leading global car manufacturers, has been hit by the car crisis in Europe, where sales are heading for a sixth straight yearly fall. It has been cutting costs and shifting production to cheaper and faster growing countries.
But it took heart from the fact that its first quarter organic sales, which strip out currency and acquisitions, fell by just 1 percent, less than the 4 percent drop it had expected.
"A good model mix and higher sales in China were the primary areas of strength, but smaller sales declines than expected in Europe and South Korea also contributed," chief executive Jan Carlson said in a statement.
Pretax profit for the first quarter of 2013 rose to $170 million from $141 million in the same period of 2012, beating the average forecast in a Reuters poll of $162 million.
It said earnings were helped by the fact that it had lower costs than the year before for closing and downsizing plants to face lower demand and when it had costs for a U.S. antitrust investigation. Autoliv shares rose almost 6 percent after the earnings news.
The Swedish company was also slightly more optimistic about sales growth this year, expecting an organic sales rise of 2 to 4 percent, rather than the 1 to 3 percent expected before.
For the second quarter, it expected sales growth of around 3 percent year-on-year, and an unchanged operating profit margin of about 8.5 percent, excluding costs for production changes and antitrust probes. It stuck to its forecast for a full year profit margin of around 9 percent, again excluding costs.
It expected capacity alignment costs of between $25 to $50 million for 2013, an unchanged estimate.
(Reporting by Helena Soderpalm and Johannes Hellstrom, editing by Patrick Lannin)