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Investing.com -- Autoliv (NYSE:ALV), a leader in automotive safety systems, reported its Q1 sales at $2,578 million, exceeding the estimated $2,502 million.
The company’s Q1 adjusted earnings per share (EPS) were $2.15, while the reported EPS stood at $2.14.
The Q1 earnings before interest and taxes (EBIT) were recorded at $254 million, with an adjusted EBIT of $255 million, surpassing the estimate of $202 million.
The company’s Q1 adjusted EBIT margin was reported at 9.9%. Autoliv also maintained its forecast for 2025 adjusted EBIT margin, which is expected to be around 10-10.5%.
The improved profitability was primarily due to organic sales growth and successful execution of cost reductions.
Despite underperforming in China, where lower content vehicles outgrew higher content ones, Autoliv anticipates its record number of new launches will significantly enhance its relative sales performance in China by 2025.
The company forecasts about 2% organic sales growth for 2025. However, uncertainties in the current geopolitical and business environment make it challenging to predict the year precisely.
The company expects the foreign exchange (FX) effects on net sales to be around 3% for 2025, a slight increase from the previous estimate of around 2%.
Autoliv also predicts the call-off volatility in 2025 to be slightly lower than it was in 2024, but still higher than pre-pandemic levels.
The company anticipates the operating cash flow for 2025 to be around $1.2 billion.
The company expects raw material costs in 2025 to increase for the full year. However, it anticipates the cost pressure from general inflation to moderate in 2025.
Autoliv also expects some pressure mainly from labor, especially in Europe and the Americas, and potentially from tariffs.
The company stated that the new tariffs imposed in the first quarter did not have a significant impact on their profitability in that quarter.
Autoliv plans to continue passing on tariff costs to its customers. The company also sees a likelihood of new or increased or changed tariffs or other related trade restrictions being imposed in 2025 that may impact its operations.
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