Published : 1 year ago, on 19/07/2023

Truck maker Volvo’s quarterly profit surges, beats estimates

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)