Autoliv raises market outlook
Shares rise 6.48% but company spokesman cautions against seeing numbers as trend
Stockholm: Autoliv, the world's biggest maker of air bags and seat belts, raised fourth quarter guidance on the back of rallying markets in China and other emerging markets.
Its shares rose more than 6 per cent after the latest signs that the auto industry, slammed by the worst econ-omic downturn in decades, is showing signs of recovery.
But spokesman Mats Odman cautioned that car production would fall after the fourth quarter "which is almost always stronger than the first quarter."
Inventory build-up in the final months of the year would also lose pace in early 2010 and Odman said the margin gain for the fourth quarter was "not representative" for the coming quarters.
Autoliv said it expects fourth quarter organic sales to grow by at least 20 per cent year-on-year and its fourth-quarter operating margin, excluding restructuring charges, should improve to at least 9 per cent on a non-US GAAP measure.
At the beginning of the current quarter, Autoliv forecast fourth-quarter organic sales growing by more than 10 per cent while its operating margin was expected to be at least 7 per cent, excluding restructuring charges.
Autoliv said it expected consolidated net sales to increase by at least 35 per cent, provided current exchange rates prevail, compared with its earlier forecast of about 25 per cent.
Shares in the firm rose 6.48 per cent in early trading in Stockholm, outperforming the wider index. Evli Bank analyst Michael Andersson said the raised outlook could prompt an increase in earnings expectations for 2010.
"There is an ongoing discussion about next year and whether there will be some pullback due to the incentive schemes that ran this year," he said.
"But now they are talking about global growth led by China among others, meaning there is reason to believe that things may look better next year as well."
Chief Executive Jan Carlson said a rally in light vehicle sales in China and other emerging markets was stronger than anticipated and customers re-build vehicle inventories.
