Quarter in brief
Stronger order books in North America and Europe supported a solid third quarter for Volvo. The truckmaker reported adjusted operating profit of 14.7 billion kronor, or $1.32 billion, for the three months through September, and total truck orders increased 26%. Management said it plans to gradually increase production.
Stocks and the wider market
In early Friday trading in Stockholm, Volvo's stock slipped up to 3.5%, tracking declines in major European indexes, though it remained up 6.7% for the year through Thursday. Industrywide, the truck market is climbing out of a downturn, with Volvo, Daimler Truck and Traton seeing North American momentum. That said, recent softness in US orders and record high diesel prices are complicating the timing for a cleaner sales upturn as haulers face tighter margins.
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Outlook and what it means for your portfolio
Volvo expects further market improvement next year and plans a gradual production increase. The company anticipates North American total sales reaching 300,000 - more than a 13% rise - whereas Europe is set for only modest expansion. CEO Martin Lundstedt pointed to fleets replacing older vehicles and the service business as key drivers of the current recovery. Longer term, European truckmakers face a shifting competitive map as China rapidly electrifies, with battery trucks on track to make about a third of Chinese truck sales this year and implications for global exports.
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