EL7.AI
StocksMediumUpdated×2•Originally published 23 October 2026•Updated 23 October 2026•
3 min read

Autoliv narrows operating margin outlook to 10.5% as quarterly sales decline

Key Facts

1Autoliv's net sales were $2.693 billion in the third quarter, down 0.5% year over year, while organic sales declined 1.1%.
2Diluted EPS was $2.13, down 6.8% year over year, and adjusted EPS fell 5.7%.
3Operating cash flow was $239 million, and free operating cash flow was $124 million in the third quarter.
4Autoliv's sales in India grew nearly 30%, and sales to Chinese automakers increased by more than 20%.

Autoliv narrowed its full-year adjusted operating margin outlook to around 10.5%, the lower end of its previous range, citing additional cost headwinds. The announcement came as the company reported third-quarter net sales of $2.693 billion, down 0.5% year over year, with organic sales down 1.1%. Diluted EPS was $2.13, 6.8% below its level a year earlier, while adjusted EPS fell 5.7% to $2.19. Estimates from 20 analysts, published on the company's website on October 19, put average EPS at $2.18 and average sales at $2.718 billion. Adjusted earnings therefore edged above the published average, while sales came in below it.

The decline in organic sales was narrower than the drop in global light vehicle production during the quarter, according to the company's comparison, and Autoliv attributed its performance to strength in Asia. The CEO said the company's sales in India grew nearly 30%, and sales to Chinese automakers increased by more than 20%. He added that strong sales growth in Japan helped Autoliv's sales in Asia exceed its sales in China during the quarter. The company opened its second research and development center in China during the period to support partnerships with local automakers and its innovation capabilities and long-term growth. Despite these regional gains, the company's overall organic sales contracted during the quarter.

Autoliv said additional cost pressures were linked to raw materials, logistics and recent flooding in Thailand, as well as lower call-off accuracy since the first quarter. It said most of these pressures were offset by labor efficiency, material savings through value engineering, and negotiations with customers and suppliers. The outlook reflects a divergence between cost pressure on margins and the company's continued aim of stable annual operating cash flow. The guidance included no change to the organic sales outlook the company had previously announced.

Free operating cash flow reached $124 million, compared with $153 million a year earlier. The figures follow second-quarter net sales of $2.803 billion and an adjusted operating margin of 9.6%. At the time, the company had maintained its full-year adjusted operating margin outlook at 10.5% to 11%, and said customer compensation and mitigation initiatives would make a much larger contribution in the fourth quarter. In its latest report, the company attributed the offset of most cost pressures to efficiency, savings and negotiation measures.

Autoliv forecast a strong fourth quarter, supported by increased product launches and substantial raw material cost recoveries. This follows its previous expectation that customer compensation and mitigation initiatives would have a greater impact at year-end, while the company's current guidance points to continued cost pressure on operating margins. The company's shares closed at $118.88 on October 22, before the third-quarter results announcement. Investors are awaiting the company's next report, scheduled for January 29, 2027, on fourth-quarter 2026 results.