Autoliv Inc. (NYSE:ALV) delivered stronger-than-expected third-quarter results on Friday before market open, driven by higher organic sales and cost efficiencies, and reaffirmed its full-year outlook.
The company reported adjusted earnings of $2.32 per share, topping analysts’ estimates of $2.04 and rising 26% from $1.84 a year earlier.
The quarterly net sales climbed 5.9% to $2.71 billion, exceeding the consensus forecast of $2.68 billion and up from $2.56 billion in the same quarter last year.
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Operating Margin Boosted by Cost Efficiencies and Tariff Management
Autoliv said profitability improved notably, driven by organic sales growth, effective cost reduction initiatives, and favorable supplier settlements and compensations.
The company estimated that U.S. tariffs reduced the operating margin by about 20 basis points, as it successfully passed on most of the tariff-related costs to customers.
Net organic sales rose by 3.9%, falling 0.7 percentage points below the global light vehicle production (LVP) growth. S&P Global’s October 2025 data indicates that Global LVP grew by 4.6% in the third quarter of 2025, compared to the same period last year.
The regional and customer mix had an estimated one percentage point negative impact on sales, while tariff compensations contributed around 0.5 percentage points.
The company’s third-quarter adjusted operating income increased 14% to $271 million, while the adjusted operating margin expanded to 10% from 9.3% a year ago. Operating cash flow rose to $258 million from $177 million a year earlier.
The cash and cash equivalents stood at $225 million at the end of the third quarter.
CEO’s Comments: Record Quarter Driven by Americas and Europe
Chief Executive Mikael Bratt said, “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. The performance was driven by better than expected sales, especially in Americas and Europe, and successful actions to reduce costs and achieve tariff compensation.”
“We recovered around 75% of tariff costs in the third quarter, and expect to recover most of what remains in Q4. We continue to closely monitor the situation, and remain adaptive and agile,” he added.
Full-Year Guidance Reaffirmed
Autoliv maintained its full-year 2025 guidance, projecting around 3% organic sales growth, an adjusted operating margin between 10% and 10.5%, and about $1.2 billion in operating cash flow. The company expects capital expenditure of roughly 4.5% of sales.
Bratt commented on the outlook: “We remain confident in achieving our full year guidance of an adjusted operating margin of around 10-10.5%, currently expecting to come in at the midpoint of the range.”
Price Action: ALV shares were trading higher by 0.10% to $121.27 premarket at last check Friday.
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