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Volvo reports Q2 profit and adjusted EBIT ahead of estimates, shares rise

Published 07/18/2024, 04:48 AM
Updated 07/18/2024, 04:49 AM
© Reuters.  Volvo reports Q2 profit and adjusted EBIT ahead of estimates, shares rise
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European carmaker AB Volvo (OTC:VLVLY) saw its shares rise Thursday after it reported a stronger-than-expected increase in second-quarter operating profit, though it noted that demand is starting to ease from last year's peak levels.

The Sweden-based automaker said its Q2 operating profit surged to 20.3 billion crowns ($1.92 billion), compared to 14.6 billion crowns a year ago and surpassing the mean forecast of 18 billion crowns in an LSEG analyst poll.

Volvo’s shares jumped more than 4% in European trading.

The second-quarter operating margin improved to 14.5%, up from 10.3% in the same period last year.

Moreover, adjusted EBIT was reported at $19.44 million crowns, 6% ahead of consensus estimates.

“We view the results as slightly positive overall,” analysts at RBC Capital Markets commented.

“The main divisions – Trucks and CE – performed largely in line, with Buses and Penta driving much of the adj. EBIT beat,” they added.

Despite this, net truck order intake remained steady at 47,760 vehicles, while deliveries fell 8% year-on-year to 58,935 vehicles.

"The Volvo Group delivered good profitability as demand in many markets continued to normalise compared with the high levels of 2023," said CEO Martin Lundstedt.

Looking ahead, the company raised its forecast for the total European heavy truck market this year to 290,000 new vehicles, up from the 280,000 projected in April. The forecast for the North American heavy truck market remains unchanged at 290,000 vehicles.

However, the outlook for the Chinese medium and heavy-duty market was revised down to 750,000 vehicles from 800,000.

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