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Truck maker Volvo’s quarterly profit surges, beats estimates
Global Banking & Finance Review®
Company
By Marie Mannes
STOCKHOLM (Reuters) -Swedish truckmaker AB Volvo on Wednesday logged a better-than-expected 57% jump in second-quarter adjusted operating profit, helped by price hikes.
“We have been successful in improving margins while managing cost inflation and increased disturbances in the supply chain,” Chief Executive Martin Lundstedt said in a statement.
Operating profit before restructuring charges and legal claims surged to 21.7 billion crowns ($2.1 billion), beating a Refinitiv consensus estimate of 18.4 billion crowns.
Orders for the quarter fell 10%, which Lundstedt said was partly due to Volvo’s reluctance to take on too many orders as well as partly the result of buyer caution.
Truck makers have for a few years now kept a tight lid on order books, aiming to avoid excessive lead times amid global shortages of key components.
JPMorgan analysts said in a note to clients that the company had delivered solid results with healthy performances across the board.
Volvo also boosted its estimates for industry-wide heavy truck sales in Europe and North America, saying it now expects 330,000 in each market up from 320,000 and noting that larger fleets were continuing to replace older vehicles.
Shares in Volvo were down 3% at 0743 GMT, underperforming a 0.8% decline in the OMX Stockholm 30 index.
(Reporting by Marie Mannes; editing by Anna Ringstrom, Jason Neely and Edwina Gibbs)
Supply chain disturbances refer to disruptions in the flow of goods and services within a supply chain. These can be caused by various factors, including natural disasters, economic fluctuations, or logistical challenges.
Heavy truck sales refer to the sales of large vehicles designed for transporting goods, typically over long distances. These sales are often used as an economic indicator of industrial activity and logistics demand.
Margin improvement refers to strategies and actions taken by a company to increase its profit margins, which can involve reducing costs, increasing prices, or enhancing operational efficiency.
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