ALV earnings analysis
What we found in ALV's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Autoliv delivered Q2 revenue of $2.803 billion, up 3.3% year over year, and 1.0% organic growth, but reported profitability was burdened by Türkiye restructuring: GAAP operating margin fell to 6.8% from 9.1% and diluted EPS fell to $1.35 from $2.16. Underlying trends improved, with adjusted operating margin reaching 9.6% and free operating cash flow rising to $340 million. Management maintained its FY2026 outlook, including approximately $1.2 billion of operating cash flow, but expects demand, tariff, commodity, and geopolitical uncertainty to persist.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Sales outgrew global vehicle production
- Q2 net sales rose 3.3% year over year to $2.803 billion, with 1.0% organic growth despite global light-vehicle production declining 0.3%.
- Underlying profitability improved
- Adjusted operating margin improved 0.4 percentage points year over year to 9.6%, while adjusted operating income increased 7.3%, supported by direct-material cost savings and lower S,G&A costs.
- Record Q2 cash generation
- Q2 operating cash flow increased $157 million year over year to a record second-quarter $434 million; free operating cash flow more than doubled to $340 million from $163 million.
- Asia and Chinese OEM momentum
- China domestic-OEM sales grew organically around 44%, and Chinese OEMs represented 55% of China sales versus around 40% a year earlier. India organic sales grew 36%.
- Leverage improved despite buybacks
- Net debt declined to $1.695 billion at June 30 from $1.773 billion at March 31, while leverage improved to 1.2x from 1.3x and remained below the company's 1.5x target.
- Türkiye restructuring offers future savings
- The Türkiye exit is expected to yield approximately $40 million of annual pre-tax savings beginning in 2027, reaching full run-rate in 2028.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Restructuring sharply reduced GAAP earnings
- GAAP operating margin fell 2.3 percentage points year over year to 6.8%, and diluted EPS declined 38% to $1.35, primarily reflecting Türkiye capacity-alignment costs.
- Türkiye closure carries sizable execution costs
- Türkiye restructuring is expected to generate approximately $142 million of total charges, including $90 million recognized in Q2, and approximately $129 million of cash outflow; full closure is anticipated in the first half of 2028.
- Raw-material inflation remains a headwind
- Higher raw-material prices had an approximately $21 million gross Q2 profitability impact; management estimates an approximately $110 million gross impact for FY2026 before mitigation.
- Tariff recovery remains uncertain
- Tariffs had an approximately $7 million net negative Q2 impact after customer compensation and reduced operating margin by around 35 basis points; recovery levels may vary going forward.
- Americas and EMEA organic sales declined
- Americas organic sales declined 3.3% and EMEA declined 2.2% in Q2; management cites tariffs, unfavorable South America mix, and lower content on certain replacement models.
- Outlook depends on volatile external assumptions
- No material changes were made to the risk factors disclosed in the 2025 Form 10-K, but management's FY2026 outlook assumes no material tariff or trade-restriction changes and LVP declining around 2.5%.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.35
- Gross margin
- 18.2%
- Operating margin
- 6.8%
- Segment
- Airbags, Steering Wheels and Other revenue: $1.906 billion, up 5.2% reported and 3.0% organically year over year
- Segment
- Seatbelt Products and Other revenue: approximately $897 million, down 0.5% reported and 3.0% organically year over year
What they said about what is next.
Autoliv reiterated FY2026 guidance: around 0% organic sales growth, adjusted operating margin of around 10.5%-11%, operating cash flow of around $1.2 billion, and capex below 5% of sales. It expects Q3 adjusted operating margin around the 1H26 level, followed by significant Q4 improvement.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 17, 2026
- Autoliv reported revenue of $2,753 million in Q1 2026, up from $2,578 million in Q1 2025, with gross profit rising to $526 million but operating income falling to $237 million. Operating cash flow swung to a use of $76…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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