Autoliv Inc. (NYSE: ALV) stock fell 1.14% on December 27th, 2018 (Source: Google finance) after the company’s stock is downgraded by equities research analysts at Evercore ISI from an “in-line” rating to an “underperform” rating in a research report. Deutsche Bank AG has also decreased its position in Autoliv Inc. by 23.2% in the third quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The institutional investor-owned 179,885 shares of the auto parts company’s stock after selling 54,449 shares during the quarter. Deutsche Bank AG owned approximately 0.21% of Autoliv worth $15,589,000 at the end of the most recent quarter. The stock lost over 32.7% in the last six months (Source: Finviz)
Meanwhile, since June 2011, Autoliv has been subject to an investigation of anti-competitive behavior among suppliers of occupant safety systems in the European Union (the “EC investigation”). Autoliv has been cooperating with the EC investigation. The EC previously concluded a discrete portion of its investigation in November 2017 and imposed a fine on the Company that was paid during the first quarter of 2018. Further, the Management now has reason to believe that the EC will seek to impose a fine in connection with the remaining portion of the EC investigation. According to management’s best estimation and based on the advice of our legal counsel, the Company will accrue $210 million in the fourth quarter of 2018 in connection with the remaining portion of the EC investigation. Any such fine from the EC will likely not be tax deductible. The Company believes that a fine could be issued during the first half of 2019, although this may be delayed. The fine would be payable within 90 days after the investigation is ultimately resolved and be denominated in euros.
On the other hand, ALV has reported consolidated sales growth of 4.1% to $2,033 million for the September 2018 quarter. Quarterly organic sales grew by 6.4%, mainly driven by 22% organic sales growth in Americas. Airbags sales grew organically by 8% and seatbelts sales grew organically by 3%. Both the reported and adjusted operating margin was 9.5%. For the full year 2018, the company expects organic sales to increase by around 6% and the adjusted operating margin to be around 10.5%.
ALV has declared a quarterly dividend of 62 cents per share for the first quarter 2019. The dividend will be payable on Thursday, March 7, 2019 to Autoliv shareholders of record on the close of business on Friday, February 22.