Volvo Earnings Beat Forecasts Amid Surging Demand, Cautions on Semiconductor Disruption

Volvo Earnings Beat Forecasts Amid Surging Demand, Cautions on Semiconductor Disruption

STOCKHOLM — Volvo AB on Thursday posted forecast-beating earnings amid surging demand for trucks and construction equipment, but cautioned on further production disruptions amid the global semiconductor shortage.

The Swedish truck maker said first-quarter net profit rose 89% on year to 8.84 billion Swedish kronor ($1.05 billion), beating a FactSet analyst forecast of SEK6.87 billion.

Sales rose to SEK94.02 billion, beating a forecast of SEK93.55 billion.

Truck deliveries rose 17% in the quarter to 52,444 trucks, while order intake more than doubled to 85,461 trucks, it said.

The company said a strong freight market with increased transport volumes, not least driven by e-commerce, and rising freight prices is seeing customers renew and expand their fleets to meet increased demand.

However, previously announced stop days in truck production during the second quarter will go ahead due to the global shortage of semiconductors, with the supply chain remaining unstable.

“We can therefore not rule out further disruptions in both the truck business and other parts of the group,” Chief Executive Martin Lundstedt said.

In construction equipment, many countries are investing in aging infrastructure while construction activity in several other sectors is also driving demand, it said.

Volvo backed its 2021 truck market forecasts in all regions except China, where it now sees the heavy- and medium-duty truck market at 1.56 million from 1.43 million.

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