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Investing.com -- Automotive safety systems supplier Autoliv Inc. reported third-quarter earnings that exceeded analyst expectations, driving shares up 3.2% premarket as investors responded positively to the company’s strong performance and confident outlook.
The company posted adjusted earnings per share of $2.32 for the third quarter of 2025, beating the consensus estimate of $2.09 by 11%. Revenue came in at $2.71 billion, slightly above the $2.7 billion analysts had expected and representing a 5.9% increase from the same period last year. Organic sales growth was 3.9% compared to the global light vehicle production increase of 4.6%.
Autoliv’s operating margin improved significantly to 9.9%, with adjusted operating margin reaching 10.0%, up from 9.3% in the third quarter of 2024. The company attributed this improvement to organic sales growth, successful cost reduction initiatives, and positive effects from supplier settlements and compensations.
"I am pleased to, once again, report a record breaking quarter. This quarter is the best third quarter so far, for sales, operating income and EPS," said Mikael Bratt, President and CEO of Autoliv. "The performance was driven by better than expected sales, especially in Americas and Europe, and successful actions to reduce costs and achieve tariff compensation."
Operating cash flow increased by 46% to $258 million, reflecting improved profit and working capital management. The company maintained its full-year 2025 guidance, projecting around 3% organic sales growth and an adjusted operating margin of approximately 10-10.5%, with expectations to hit the midpoint of that range.
Autoliv noted particularly strong growth in India, which accounted for about one-third of its global organic growth in the quarter. The company also highlighted its continued investment in China, including plans for a second R&D center and a strategic agreement with CATARC to advance automotive safety standards.
The company recovered approximately 75% of tariff costs in the third quarter and expects to recover most of the remainder in the fourth quarter.