UPDATE 2-Autoliv’s Q2 profit beats forecasts, raises outlook

* Q2 pretax profit $206 million vs forecast $180 million

* Operating margin at record 12.7 percent

* Raises full-year outlook for net sales to almost 35 pct

* Shares up 2.4 pct vs weaker Stockholm bourse

(Adds analyst’s comment, background)

By Victoria Klesty and Mia Shanley

STOCKHOLM, July 23 (BestGrowthStock) – Autoliv Inc (ALIVsdb.ST: )
(ALV.N: ), the world’s biggest maker of airbags and seatbelts,
raised its full-year sales outlook on Friday as a sturdier
global economy helped it push second-quarter earnings and
margins to record highs.

The company, whose customers include many of the world’s
leading automakers, beat analysts’ forecasts for both the top
and bottom lines thanks to a strong rebound in its main markets
in Europe, North America and Japan.

It recorded an operating margin of 12.7 percent in the
second quarter and was bullish about the current quarter.

“We look forward to what could be the strongest third
quarter in this company’s history,” Chief Executive Jan Carlson
told Reuters.

Autoliv said net sales would rise by close to 25 percent in
the third quarter, with an operating margin of at least 10
percent.

Autoliv shares were up 2.1 percent at 402.40 crowns by 1222
GMT, while the Stockholm market index (.OMXS30: ) was down 0.7
percent.

“The guidance for Q3 was higher than expected,” said an
analyst. “Guidance for the whole year increased, naturally,
which means there is an indirect increase in the guidance for
Q4, so that was of course positive.”

But Autoliv’s outlook for the year contrasts with more
cautious views taken by others in the auto industry.

Global carmakers are braced for lower sales as special
government-backed car buying incentive schemes in Europe are
phased out and consumers pull back from big-ticket buys due to
economic uncertainty. [ID:nLDE6600S2]

Autoliv boosted its forecast for 2010 net sales, eyeing a
rise of close to 35 percent rather than the previous 30 percent
prediction, on the back of new industry production forecasts.

Pretax earnings were $206 million in the second quarter,
compared with a $28 million loss a year ago, and landing above
the average $180 million forecast given in a Reuters poll of
analysts.

STRONG SALES MIX

The company, which competes with U.S.-based TRW Automotive
Holdings (TRW.N: ) as well as in-house production lines at
automakers, said car makers were ramping up production.

It noted that Chrysler nearly quadrupled its production in
the second quarter while GM [GM.UL] has nearly doubled its
output and Ford (F.N: ) has raised production by 46 percent.

However, Carlson said the company’s sales forecast was not
based on any one region. “We outperform in all regions but
Europe, where we are in line (with market growth),” he said.

“That is because our market share is so increadibly strong
it is hard to outperform, and we have also a couple of customers
whose models haven’t been as successful as we hoped.”

Shares in Autoliv, which also produces steering wheels and
anti-whiplash systems, have gained more than 25 percent since
the start of the year.

TRW, which makes brakes as well as airbags and seat belts,
raised its full-year sales outlook in May by about 4 percent
though it warned that it could be hit in the coming quarters by
rising commodity costs and a slowdown in auto production in
Europe.

Carlson said he did not see any increased price pressures
ahead but added that Autoliv expected raw material costs to rise
$16 million in 2010 from the previous year.

Stock Market Investing

(Additional reporting by Sven Nordenstam; Editing by Will
Waterman and Greg Mahlich)

UPDATE 2-Autoliv’s Q2 profit beats forecasts, raises outlook