Autoliv Is a Safe Bet: Fool by Numbers

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.

  • Management attributed the strong revenues to higher-than-expected production of light vehicles, especially in Europe and Japan.
  • 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%.
  • 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)

*Expressed in percentage points.

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%

Owner Earnings

$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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