Autoliv shaves outlook due to Europe's weak car market
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(Reuters) -- Car safety equipment maker Autoliv trimmed its profit and sales forecasts today after a bigger-than-expected drop in third quarter earnings 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 in a statement.
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 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 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.
Autoliv ranks No. 20 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $8.23 billion in 2011.
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