STOCKHOLM — Veoneer on Friday said it expected to reduce operating losses this year and markedly improve cash flows, despite the coronavirus-induced crisis in the automotive industry, as cost cuts and efficiency actions started to bite.
The Sweden-based supplier, which makes radars, vision systems and advanced driver-assistance software, also dropped its forecast for organic sales growth in 2020, but said it still expected to outperform global car production.
The company, which competes with Aptiv and Bosch, said it reported a $122 million operating loss for the quarter, but that was still an improvement over the $128 million operating loss is posted during the same quarter last year. Total revenue fell 27 percent to $362 million.
“We have a strong cash flow given where we are, and we are seeing good results from our internal actions,” Veoneer CEO Jan Carlson told Reuters. “Given the terrible situation in the industry and the rest of the world, we think we had a very strong quarter.”
Shares in the money-losing company gained 8.8 percent Friday following the earnings release. Veoneer’s stock is still down 42 percent this year.
“Shares have been very weak in the last months despite taking action that has and will improve cash flow going forward,” analyst firm Carnegie said in a research note.
With the global car market already weak for the better part of the past two years, Veoneer has moved to cut costs, with actions further accelerated as the coronavirus pandemic hit the industry.
Fresh cost measures include staff cuts and furloughs.
On Thursday, the company announced a full exit from its brake control business.
