Autoliv Earnings: Results Impress Despite Autoworker Strike; Firm Initiates 2024 Outlook

Narrow-moat Autoliv reported fourth-quarter earnings per share before special items of $3.74, smashing through the $3.37 FactSet consensus EPS by $0.37 and $1.72 better than the $2.02 reported last year. We believe the beat was due to increased customer output, despite the United Auto Workers labor stoppage that ended on Oct. 30. Revenue increased 18% to $2.8 billion as volume, customer recoveries, and the chip shortage all improved compared with a year ago. Excluding favorable currency, organic revenue increased 16%, outperforming a 9% increase in global light-vehicle production by 7 percentage points due to the launch of new business and customer recoveries. The time value of money added $1, while minor changes to our model also added $1 to our fair value, raising our fair value estimate to $103 from $101. The 3-star-rated shares of Autoliv trade at a 4% discount to our new fair value.