Autoliv Inc. (ALV) took the top off its 2026 profit goal on Friday. The airbag and seatbelt maker now expects an adjusted operating margin of around 10.5%, the low end of its earlier range of around 10.5% to 11%.

The third quarter shows why. Net sales fell 0.5% to $2,693 million from $2,706 million, and organic sales were down 1.1%, the company said in its release. Global light vehicle production fell 1.9% in the quarter, according to Mobility Global data cited by Autoliv.

Adjusted operating margin was 9.7%, against 10.0% a year earlier. Adjusted earnings per share fell to $2.19 from $2.32, and diluted earnings per share were $2.13.

China turned negative

• Americas organic sales fell 2.9%.
• Europe, the Middle East and Africa fell 2.9%.
• China fell 5.8%.
• Asia excluding China grew 8.8%, with India up 29%.

That China figure is a reversal. Organic sales there were still up 0.5% for the first nine months, so the decline arrived in the third quarter. Our earnings preview set out what the quarter had to show.

Customers covered most of the tariff bill

Customers paid back more than 80% of the tariff costs Autoliv faced in the quarter, the company said. That left a net cost of about $6 million, the same level as a year earlier. Counting dilution, tariffs took around 35 basis points (hundredths of a percentage point) off the quarter's operating margin.

Raw materials were a gross headwind of about $42 million. For the full year the company expects about $120 million and plans to offset a majority of it.

Autoliv bought back 1.23 million shares for $150 million, an average of $121.69 each, and paid a dividend of $0.87 per share. Leverage held at 1.3 times, under its ceiling of 1.5 times.

A fourth quarter that has to match nine months of cash

The company kept its forecast for operating cash flow of around $1.2 billion. It generated $598 million in the first nine months, $239 million of that in the third quarter.

Reaching the target means about $602 million in the fourth quarter alone, slightly more than the first three quarters combined, as calculated by Trend & Ticker.

President and Chief Executive Mikael Bratt pointed to "a strong fourth quarter supported by an increasing number of product launches and significant raw material recoveries." Those results arrive on January 29, 2027.