Volvo's profit rev up 38% amid strong truck demand
Swedish car maker Volvo released quarterly results on Friday that impressed investors as its net profit rose by 38% compared to a year ago to notch the group's best ever third quarter.
Volvo Ab
29,660.00p
16:30 18/04/24
Diluted earnings per share revved up 38% to 3.67 Swedish krona as net profit jumped to Kr7.46bn from Kr5.41bn a year earlier, beating the FactSet consensus that expected Kr6.9bn in net profit.
Profits were helped by sales increasing 21% to Kr92.3bn, in line with forecasts, as the company said market momentum continued in its European markets and the Americas. Adjusted operating margin of 11.1% was higher than the 10.4% expected.
Sales of trucks rose 23%, while heavy construction equipment sales swelled 24%.
Volvo chief executive officer Martin Lundstedt said demand for Q3 had been robust in both their vehicle and service business continuing to grow at a good pace. He also said it had been the best third quarter ever for the group but assured the company had not yet reached its full potential. "There is more to do to improve profitability and drive cash flow," he said, working with suppliers to meet demand and reduce delivery times.
He added that high activity level in the North American economy translates into a strong freight environment with high transport volumes and good freight rates, with customers both renewing and expanding their fleets, "a development which is expected to continue into 2019".
Given the strong demand, he expected supply chain constraints, in particular in North America, to remain in the near-term.