NEW YORK (
stock has jumped 5% to $42.50 shortly after the opening bell, after the manufacturer of auto safety systems raised its guidance for the fourth quarter.
Autoliv predicts fourth-quarter organic sales growth of at least 20% on non-U.S. GAAP measures compared to a year ago and for its operating margin to improve at least 9% on non-U.S. GAAP measures, excluding restructuring charges. Autoliv also expects consolidated net sales to increase by at least 35%, provided that current exchange rates prevail.
When the current quarter began, Autoliv thought fourth quarter consolidated net sales would increase by about 25% and organic sales growing by more than 10%. It had expected its quarterly operating margin to be at least 7%, excluding restructuring charges.
"There are two main reasons for our strong performance," says Autoliv CEO Jan Carlson.
"Most importantly, the light vehicle sales rally in China and other emerging markets is stronger than anticipated," Carlson said. "Additionally, our customers have had a greater need to rebuild vehicle inventories to appropriate levels following the very low inventories resulting from the governmental scrapping incentive programs earlier in the year."
Still, spokesman Mats Odman provides a caveat and reminds investors that the margin gain for the fourth quarter isn't representative of the coming quarters, according to
Studies show that China has overtaken the U.S. as the world's biggest market for automobiles. More than 12.7 million cars and trucks will be sold in China this year, up 44% from the previous year and surpassing the 10.3 million forecast in the U.S. according to J.D. Power and Associates.
"There is an ongoing discussion about next year and whether there will be some pull-back due to the incentive schemes that ran this year," says Evli Bank analyst Michael Andersson,
"But now they are talking about global growth led by China, among others, meaning there is reason to believe that things may look better next year as well."
Also noteworthy is that
, which could become a cash cow in 2010.
Several auto-supplier stocks have gained ground in the morning trading session.
has advanced 2.6% at $24.40.
has inched up 0.3% to $62.50.
has added 0.6% at $26.90.
-- Reported by Andrea Tse in New York
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