Autoliv Inc. (ALV) shares plunged 5.06% in Friday's intraday trading, despite the company reporting better-than-expected third-quarter earnings. The sharp decline highlights investors' concerns about the automotive safety supplier's performance in key markets, particularly China.

The Swedish-American company announced record third-quarter results, with adjusted earnings per share of $2.32, surpassing analysts' expectations of $2.09. Net sales for the quarter rose 5.9% year-over-year to $2.71 billion, in line with estimates. Autoliv also maintained its full-year 2025 guidance, projecting organic sales growth of around 3% and an adjusted operating margin of 10-10.5%.

Despite these positive figures, investors appeared to focus on potential headwinds facing the company. Autoliv's performance in China, a crucial market for automotive suppliers, showed signs of weakness. The company reported underperformance in China compared to other regions, although it noted strong growth with domestic Chinese OEMs. Additionally, the impact of U.S. tariffs, estimated at around 20 basis points on operating margin, may have contributed to investor unease.

Mikael Bratt, Autoliv's President and CEO, addressed these concerns in the earnings call, stating, "The ramp-up of certain models started slower than expected, but improved gradually during the quarter. We expect increased outperformance in China in Q4." However, this assurance did not prevent the significant sell-off in Autoliv's shares, suggesting that market participants remain cautious about the company's near-term prospects in the face of global economic uncertainties and ongoing trade tensions.