Volvo earnings fall as costs rise, warns of more production stoppages

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By Dominic Chopping


STOCKHOLM–Volvo AB on Friday posted lower first-quarter earnings amid higher freight and material costs and a previously announced provision related to its Russian assets, while it cautioned that production stoppages due to component shortages and supply-chain disruptions will continue.

The Swedish truck maker reported net profit of 7.03 billion Swedish kronor ($743.1 million), compared with SEK8.84 billion a year earlier, missing a FactSet consensus forecast of SEK7.92 billion.

Sales rose to SEK105.32 billion, beating a forecast of SEK98.22 billion.

Truck deliveries rose 6% in the quarter, while order intake fell 47%, the company said.

“With transport activity across most regions on good levels, demand for trucks is high,” Chief Executive Martin Lundstedt said.

“We have large order books and delivery times are long, and this has made us restrictive with order slotting, which affected order intake negatively.”

For 2022, Volvo backed its truck market forecasts for Europe, North America and Brazil. It cut its Chinese heavy- and medium-duty truck market forecast to one million from 1.1 million, and raised the Indian heavy- and medium-duty truck market forecast to 325,000 from 300,000.

Volvo said it now expects the China construction-equipment market to fall 30% to 40% this year, compared with a previous estimate of a 20% to 30% decline.


Write to Dominic Chopping at dominic.chopping@wsj.com


This article was originally published by Marketwatch.com. Read the original article here.

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