© Reuters. FILE PHOTO: The logo of Volvo is seen at the Volvo Trucks plant outside Kaluga, Russia March 31, 2022. Picture taken March 31, 2022. REUTERS/Evgenia Novozhenina/File Photo
STOCKHOLM (Reuters) -Swedish truck maker AB Volvo reported first-quarter core earnings well above market expectations on Friday as it juggled strong market demand with a strained supply chain that put a cap on its ability to grow order books.
The rival of Germany’s Daimler (OTC:) Truck and Traton also said it expected supplies of components to stay unstable with more disruptions and stoppages of production expected to hamper its business.
Adjusted operating profit at the maker of trucks, construction equipment, buses and engines rose to 12.68 billion Swedish crowns ($1.33 billion) from 11.82 billion a year ago, well ahead of the 10.55 billion seen by analysts in a Refinitiv poll.
The results excluded a previously announced provision related to the war in Ukraine.
Heavy-duty truck makers have been grappling with global shortages of components, such as semiconductors, and a lack of freight capacity since market demand began to recover from the initial pandemic shock.
Russia’s invasion of Ukraine, which Moscow calls a special military operation, has since further clouded the outlook for supply chains and diesel fuels, and seen Western manufacturers such as Volvo cut production and sales in Russia.
Hobbled by the supply constraints, Volvo said order bookings of its trucks, sold under brands such as Mack and Renault (EPA:) as well as its own name, tumbled 47% year-on-year in the first quarter, while it kept unchanged forecasts for the European and North American truck markets.
($1=9.4982 Swedish crowns)
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