July 27, 2018 / 12:13 PM / 2 years ago

UPDATE 1-Autoliv Q2 profit tops forecast, but 2018 growth outlook cut

(Adds CEO comment, shares, background, detail)

STOCKHOLM, July 27 (Reuters) - Sweden’s Autoliv , the world’s largest maker of airbags and seatbelts, reported forecast-beating second-quarter operating earnings on Friday but cut its organic sales growth outlook for 2018, taking the shine off the profit beat.

In its maiden report since spinning off its electronics business Veoneer , Autoliv said its operating profit rose to $229 million from $220 million a year ago, beating the $206 million forecast in a Reuters poll of analysts.

The company, which rivals Joyson Safety Systems and ZF TRW, however forecast organic sales growth of around 8 percent this year compared with a 9.5 percent mean poll forecast, and its own previous outlook for 10 percent.

Autoliv’s Swedish shares, which had dropped in the past week on the back of 2018 profit forecast cuts from major carmakers such as General Motors and Ford, were down 1.0 percent at 1151 GMT.

Chief Executive Mikael Bratt told Reuters the outlook cut was “entirely related” to underlying car production forecasts, with several things currently impacting the market, including new emissions standards in Europe and the threat of trade wars.

“We carefully monitor the development of issues fundamental to our business such as possible NAFTA renegotiations and various trade barriers on raw materials and automotive products,” Autoliv said in a statement.

The company has been winning a lot of new business in recent years at the expense of collapsed Japanese rival Takata, which has been at the centre of the auto industry’s biggest-ever recall and filed for bankruptcy last year.

Takata was bought by Key Safety Systems earlier this year, and the joint company was renamed Joyson Safety Systems.

As it can often take as much as two years before orders translate into sales, Autoliv is only recently starting to see the impact of the new business it has won. (Reporting by Johannes Hellstrom; Editing by Jan Harvey)

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