OSLO, April 12 (Reuters) – AB Volvo (VOLVb.ST) reported document first-quarter revenue, a preliminary submitting confirmed, because the truck maker boosted its income and margins regardless of provide bottlenecks and value inflation, sending its shares up 9.6% in early commerce on Wednesday.
Its adjusted working revenue rose 45% to 18.4 billion Swedish crowns ($1.76 billion) for the January-March quarter, nicely above the 12.9 billion anticipated by analysts polled by Refinitiv Eikon.
The Swedish firm had mentioned as just lately as January it anticipated “disturbances, stoppages and further prices” to persist, with hovering inflation and the power disaster including to the ache.
Volvo didn’t elaborate on what had spurred its turnaround and didn’t present a revenue outlook in its preliminary earnings which have been launched late on Tuesday. It declined to remark additional.
“We consider this quarter was influenced by worth will increase and (a) a lot better provide chain scenario resulting in much less cease and go on the manufacturing line permitting the agency to ship very sturdy outcomes,” analysts at JPMorgan mentioned in a analysis notice.
Volvo shares have been up 8.0% at 210 crowns as of 0725 GMT versus a 0.8% rise in Stockholm’s benchmark share index.
Volvo and rivals comparable to Germany’s Daimler Truck (DTGGe.DE) and Traton (8TRA.DE) have struggled with semiconductor shortages and broader provide chain points and strained freight capability stemming from the COVID-19 pandemic and the conflict in Ukraine.
Volvo’s outcomes might sign a broad enchancment for the trade, with a very constructive “learn throughout” to Daimler Truck, Traton and Italy’s Iveco (IVG.MI) in addition to for his or her suppliers, JPMorgan mentioned.
Shares in Daimler Truck and Traton have been up 3.5% whereas Iveco was 2.3% greater.
Jyske Financial institution in a analysis notice mentioned that whereas the earnings have been sturdy, the brokerage nonetheless apprehensive that Volvo’s order consumption might fall and that the truck maker’s clients might see stagnant exercise amid international financial weak spot.
Volvo’s preliminary internet gross sales for the quarter rose to 131.4 billion crowns from 105.3 billion and topped the 118.6 billion anticipated by analysts.
Its adjusted working margin rose to 14.0% from 12.0% and earnings on the group’s two main divisions, truck making and development tools, each confirmed progress.
Internet gross sales within the truck phase rose to 89.6 billion crowns from 69.6 billion, beating a forecast of 79.7 billion.
The division’s working revenue jumped to 12.7 billion from 8.7 billion whereas analysts anticipated a decline to eight.4 billion.
Daimler Truck final month mentioned its outlook had improved and that its revenue would develop this 12 months, however the firm’s share worth nonetheless fell amid considerations that inflation would weigh on its margins.
($1 = 10.4303 Swedish crowns)
Reporting by Terje Solsvik; enhancing by Sonali Paul and Jason Neely
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