Autoliv Expands in Asia - Analyst Blog
May 09 2013 - 6:40AM
Zacks
The global leader of automotive safety systems, Autoliv
Inc. (ALV) announced the construction of a new airbag
manufacturing plant in Chonburi, located 70 km east of Bangkok. The
company took this initiative to meet the increased production of
vehicles and rising demand for airbag fitments in Asia.
Autoliv will be investing around $3 million for the plant, which
will be located adjacent to existing airbag facility of the company
in Thailand. The plant covers 4,800 square meters of area and is
expected to start functioning from Sep 2013.
For full year 2013, Autoliv anticipates organic sales growth in the
range of 2% to 4%. It expects that airbag module volume will be 1.5
million units in 2013. The company also anticipates that airbag
volume will improve to 3.5 units by 2015. Autoliv also believes
that airbag fitment rates will benefit from the implementation of
New Car Assessment Program for Southeast Asian Countries (ASEAN
NCAP) program.
Autoliv has a stable market share in both airbag modules and seat
belts in North America, Europe and Asia. The company has
continuously expanded in low-cost countries, including Romania and
China, in order to meet local demand and to consolidate
manufacturing from high-cost countries.
Autoliv posted a 20.6% increase in earnings per share to $1.29 in
the first quarter of 2013 from $1.07 year ago, beating the Zacks
Consensus Estimate by a couple of cents. Earnings benefited from
lower capacity alignments and antitrust investigations costs,
partly offset by lower underlying operating profit. Consolidated
revenues slid 2.0% to $2.1 billion due to negative currency effects
and a small divestiture.
However, we are concerned about the company’s increased raw
material costs. Further, the company faces significant customer
concentration risks as its top-5 represent about 60% of sales.
Currently, Autoliv retains a Zacks Rank #3 on its stock, which
translates to a Hold rating. Other stocks that are performing well
in the industry include Tower International, Inc.
(TOWR), Visteon Corp. (VC) and STRATTEC
Security Corp. (STRT). They carry a Zacks Rank #1 (Strong
Buy).
AUTOLIV INC (ALV): Free Stock Analysis Report
STRATTEC SEC CP (STRT): Free Stock Analysis Report
TOWER INTL INC (TOWR): Free Stock Analysis Report
VISTEON CORP (VC): Free Stock Analysis Report
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