Business Express is an online portal that covers the latest developments in the world of business and finance. From startups and entrepreneurship to mergers and acquisitions, Business Express provides reporting on the stories that matter most to business leaders and decision-makers.The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.
2023 04 12T045756Z 1 LYNXMPEJ3B056 RTROPTP 4 VOLVO RESULTS
2023 04 12T045756Z 1 LYNXMPEJ3B056 RTROPTP 4 VOLVO RESULTS

Truck maker Volvo posts record Q1 as sales, margins beat forecasts


By Terje Solsvik

OSLO (Reuters) – AB Volvo reported record first-quarter profit, a preliminary filing showed, as the truck maker boosted its revenue and margins despite supply bottlenecks and cost inflation, sending its shares up 9.6% in early trade on Wednesday.

Its adjusted operating profit rose 45% to 18.4 billion Swedish crowns ($1.76 billion) for the January-March quarter, well above the 12.9 billion expected by analysts polled by Refinitiv Eikon.

The Swedish company had said as recently as January it expected “disturbances, stoppages and extra costs” to persist, with soaring inflation and the energy crisis adding to the pain.

Volvo did not elaborate on what had spurred its turnaround and did not provide a profit outlook in its preliminary earnings which were released late on Tuesday. It declined to comment further.

“We believe this quarter was influenced by price increases and (a) much better supply chain situation leading to less stop and go on the production line allowing the firm to deliver very strong results,” analysts at JPMorgan said in a research note.

Volvo shares were up 8.0% at 210 crowns as of 0725 GMT versus a 0.8% rise in Stockholm’s benchmark share index.

Volvo and rivals such as Germany’s Daimler Truck and Traton have struggled with semiconductor shortages and broader supply chain issues and strained freight capacity stemming from the COVID-19 pandemic and the war in Ukraine.

Volvo’s results could signal a broad improvement for the industry, with a particularly positive “read across” to Daimler Truck, Traton and Italy’s Iveco as well as for their suppliers, JPMorgan said.

Shares in Daimler Truck and Traton were up 3.5% while Iveco was 2.3% higher.

Don't miss out on any breaking news or insightful opinions!
Subscribe to our free newsletter and stay updated on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email.

Jyske Bank in a research note said that while the earnings were strong, the brokerage still worried that Volvo’s order intake could fall and that the truck maker’s customers could see stagnant activity amid global economic weakness.

Volvo’s preliminary net sales for the quarter rose to 131.4 billion crowns from 105.3 billion and topped the 118.6 billion expected by analysts.

Its adjusted operating margin rose to 14.0% from 12.0% and earnings at the group’s two major divisions, truck making and construction equipment, both showed progress.

Net sales in the truck segment rose to 89.6 billion crowns from 69.6 billion, beating a forecast of 79.7 billion.

The division’s operating profit jumped to 12.7 billion from 8.7 billion while analysts expected a decline to 8.4 billion.

Daimler Truck last month said its outlook had improved and that its profit would grow this year, but the company’s share price still fell amid concerns that inflation would weigh on its margins.

($1 = 10.4303 Swedish crowns)

 

(Reporting by Terje Solsvik; editing by Sonali Paul and Jason Neely)

 

Recent Post: