Volvo results beat forecasts, but cautions on continued supply-chain woes

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By Dominic Chopping


STOCKHOLM–Volvo AB on Friday posted forecast-beating fourth-quarter earnings amid strong truck demand, though it cautioned that production stoppages due to component shortages and supply-chain disruptions will continue.

The Swedish truck maker reported net profit of 8.0 billion Swedish kronor ($854.8 million), compared with SEK9.2 billion a year earlier, and beating a FactSet consensus forecast of SEK7.43 billion.

Sales rose to SEK102.38 billion, beating a forecast of SEK93.02 billion.

Truck deliveries rose 7.1% in the quarter, while order intake fell 21%, the company said.

“Demand for trucks across key regions remains high and we are doing our utmost to produce as much as we can to reduce long delivery times to our customers,” Chief Executive Martin Lundstedt said.

“We have had extra costs to manage production due to supply chain disruptions as well as higher costs for material and freight … We expect that the inflationary pressures will continue.”

Demand for construction equipment in Europe and North America remained good, and it almost offset a steep decline in China, the company said.

Volvo now anticipates that the China construction-equipment market will fall 20% to 30%, from a previous estimate of 15% to 25%.

The company declared an ordinary dividend of SEK6.50 plus an extra dividend of SEK6.50 a share.

For 2022, Volvo said it backed its truck market forecasts for all regions.


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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