Truck maker Volvo profit beats forecast, but chip woes linger

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The brand of Swedish truck maker Volvo is pictured on the IAA truck present in Hanover, September 22, 2016. REUTERS/Fabian Bimmer

STOCKHOLM, Oct 21 (Reuters) – Sweden’s AB Volvo beat third-quarter core earnings expectations on Thursday boosted by sturdy demand for its vehicles at the same time as lingering chip shortages hampered manufacturing.

Shortages of elements and freight capability had resulted in manufacturing disruptions and elevated prices, Volvo stated in a press release.

It additionally cautioned that it anticipated additional disruptions and stoppages, each in truck manufacturing and in different elements of the group.

Whereas recovering strongly, the group’s gross sales and adjusted earnings remained beneath pre-pandemic ranges.

Volvo, a rival of Germany’s Daimler and Traton , stated order consumption of its vehicles, together with manufacturers reminiscent of Mack and Renault, fell 4% from a yr earlier.

Volvo stated it anticipated European heavy truck market registrations to rise to 280,000 vehicles in 2021, and develop to 300,000 vehicles subsequent yr.

It expects the U.S. market to rise to 270,000 vehicles this yr, and develop to 300,000 vehicles in 2022.

It had beforehand forecast registrations in each Europe and the US at 290,000 vehicles this yr.

Adjusted working revenue on the maker of vehicles, development gear, buses and engines rose to 9.40 billion Swedish crowns ($1.09 billion) from 7.22 billion a yr earlier, beating the 8.87 billion anticipated by analysts, Refinitiv Eikon knowledge confirmed.

A world scarcity semiconductor scarcity has hit giant swaths of the manufacturing sector, not least the automobiles business, and has prevented Volvo from totally capitalising on sturdy demand.

Daimler Vehicles stated this month it will proceed to promote fewer automobiles than it might have within the coming yr as chip shortages hamper manufacturing.

($1 = 8.5917 Swedish crowns)

Reporting by Helena Soderpalm; enhancing by Niklas Pollard and Jason Neely


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