Autoliv Raises Guidance as First Quarter Beats Expectationsby
Sales of replacement air-bag inflators higher than expected
Shares gain as much as 8.3 percent, most in three years
Autoliv AB gained the most in three years after the world’s largest supplier of automotive-safety parts raised its full-year sales guidance as demand for air-bag inflators exceeded its expectations in the wake of Takata Corp.’s troubles.
Revenue increased 12 percent to $2.43 billion, the company said in a statement. That beat the $2.35 billion average of six analyst estimates compiled by Bloomberg. Autoliv now expects organic sales growth of more than 7 percent this year, up from a previous forecast of 5 percent.
“We’ve had a better development, perhaps particularly in Europe,” Chief Executive Officer Jan Carlson said in a phone interview. “We also had stronger sales in our replacement business than we expected in January.”
To take advantage of the recall of tens of millions of Takata air-bag inflators, Autoliv is adding production lines to make as many as 30 million replacements in the 2015 to 2018 period. The expansion compares with earlier plans to deliver at least 20 million replacement inflators. Carlson said the additional business will benefit the company next year and in 2018.
Autoliv’s first-quarter results were strong and the guidance reassuring after investor concerns ahead of the report, DNB analysts said in a note.
Shares gained as much as 8.3 percent, the most since April 2013, and were trading up 5.9 percent at 977 kronor as of 2:43 p.m. in Stockholm. That pared the stock’s decline for the year to 9 percent, valuing the company at 86.2 billion kronor ($10.7 billion).