Autoliv Inc. (ALV) Thursday swung to a net loss in the fourth quarter as automakers slashed production and it said it sees sales falling by almost half in the current quarter.

The Swedish-American company, the world's largest maker of seat belts and airbags, said it sees no signs of relief from the macro-economic impact. It expects net sales to drop 45% in the first quarter of 2009, including a 40% decline in organic sales.

It also expects a negative operating margin of 5% to 7%, excluding restructuring costs.

In Europe, where Autoliv generates more than half of its revenue, light-vehicle production in the fourth quarter ended Dec. 31 is estimated to have fallen almost 30%, the company said. In North America, where it derives almost a quarter of its revenue, light-vehicle production fell 26%.

Net loss in the three-month period ended Dec. 31 was $38.4 million, down from a net profit of $94 million a year earlier. Eleven analysts polled by Dow Jones and FactSet on average had forecast a net loss of $17 million.

Sales fell 33% to $1.19 billion from $1.78 billion a year ago, below analysts' forecast of $1.3 billion. The company also suffered an operating loss of $27.3 million, down from an operating profit of $164.1 million. Analysts had forecast an operating profit of $6.5 million.

"It's clearly not good but not unexpected, given the auto sector's woes," said Nordea analyst Johan Trocme. "The more worrying thing is the outlook for (the first quarter), with sales decline of more than 45% expected, and only the possibility of positive operating income for the full year.

"It's definitely ugly out there," Trocme added.

Autoliv had warned in December that earnings would be lower and said it had cut 5,900 jobs, or 14% of its workforce, in a cost-cutting program initiated in July. The measures aim to save $120 million in 2010 at a cost of $75 million. It also cut its quarterly dividend almost in half to $0.21.

At 1203 GMT, Autoliv's shares traded down 5 Swedish kronor, or 3.2%, at SEK153, outperforming the broader Stockholm market, which was down 2.7%. The shares have lost about half their value in the past 12 months.

 
   Company Web site: www.autoliv.com 
 
   -By Ola Kinnander, Dow Jones Newswires; +46-8-5451-3097; ola.kinnander@dowjones.com 
   (Ian Edmondson contributed to this article.)

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