On Jan. 31, Motley Fool Global Gains recommendation and automotive safety expert Autoliv (NYSE: ALV) released earnings for the 2007 fiscal year, a period ended Dec. 31.
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Management attributed the strong revenues to higher-than-expected production of light vehicles, especially in Europe and Japan.
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In North America, domestic carbuilders such as Ford (NYSE: F) and General Motors (NYSE: GM) ordered up 5% fewer airbags and seat belts in the fourth quarter than they did last year -- but foreign makers with plants on American soil increased their stateside production by 11%.
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The automotive parts sector is fraught with intimidating competitors, judging by their CAPS scores. But the most direct rival these Swedes have is two-star operator TRW.
(Figures in millions, except per-share data.)
Income Statement Highlights
|
FY 2007 |
FY 2006 |
Change | |
|---|---|---|---|
|
Sales |
$6,769 |
$6,188 |
9.4% |
|
Net Profit |
$288 |
$402 |
(28.4%) |
|
EPS |
$3.68 |
$4.88 |
(24.6%) |
|
Diluted Shares |
78.3 |
82.5 |
(5.1%) |
Get back to basics with the income statement.
Margin Checkup
|
FY 2007 |
FY 2006 |
Change* | |
|---|---|---|---|
|
Gross Margin |
19.7% |
20.5% |
(0.8) |
|
Operating Margin |
7.4% |
8.4% |
(1.0) |
|
Net Margin |
4.3% |
6.5% |
(2.2) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
FY 2007 |
FY 2006 |
Change |
|---|---|---|---|
|
Cash + Short-Term Investments |
$154 |
$168 |
(8.5%) |
|
Accounts Receivable |
$1,231 |
$1,207 |
2.0% |
|
Inventory |
$561 |
$545 |
2.9% |
|
Liabilities |
FY 2007 |
FY 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$834 |
$763 |
9.4% |
|
Long-Term Debt |
$1,040 |
$888 |
17.2% |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
FY 2007 |
FY 2006 |
Change | |
|---|---|---|---|
|
Cash From Operations |
$781 |
$560 |
39.5% |
|
Capital Expenditures |
$314 |
$295 |
6.5% |
|
Free Cash Flow |
$467 |
$265 |
76.1% |
|
$295 |
$410 |
(28.2%) |
Free cash flow is a Fool's best friend.
Competitive Context
|
Market Cap |
Trailing P/E Ratio |
CAPS Rating | |
|---|---|---|---|
|
Toyota Motor (NYSE: TM) |
$170,600 |
10.1 | |
|
Autoliv |
$3,820 |
13.5 | |
|
WABCO Holdings (NYSE: WBC) |
$2,730 |
28.4 | |
|
TRW Automotive Holdings (NYSE: TRW) |
$2,240 |
34.1 | |
|
Applied Industrial Technologies (NYSE: AIT) |
$1,270 |
13.9 |
Using the latest reported numbers from Capital IQ, a division of Standard & Poor's. Keep your partners close and the competition in your vest pocket.
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