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

AB Volvo (VOLVb.ST) reported record first-quarter profit, a preliminary filing showed late on Tuesday, as the truck maker boosted its revenue and margins despite supply bottlenecks and cost inflation.

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. It will report full first-quarter earnings on April 20.

“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 and rivals such as Germany’s Daimler Truck (DTGGe.DE) and Traton (8TRA.DE) 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.

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