Published 16:58 IST, January 29th 2025
Volvo’s Profit Falls More Than Expected but Orders Surge
Volvo's fourth-quarter profits fell more than expected as a drop in sales contributed to a squeeze on profit margins, while order intake rose strongly. The Swedish truckmaker's shares were up about 3 per cent in early trading on Wednesday.
Volvo's Profit Dipped: Volvo's fourth-quarter profits fell more than expected as a drop in sales contributed to a squeeze on profit margins, while order intake rose strongly. The Swedish truckmaker's shares were up about 3 per cent in early trading on Wednesday.
After record sales levels in 2023, truckmakers experienced a slowdown in sales in 2024 that has been widely expected to continue this year, with Europe expected to be hit particularly hard. Volvo has been reducing production in response to the weaker demand.
Volvo said lower sales volumes, continued investments and extra costs in North America related to supply chain issues squeezed profit margins. But order intake rose 24 per cent to 61,200 trucks, with a 37 per cent increase in Europe and a 26 per cent rise in North America.
Handelsbanken analyst Hampus Engellau said the order intake was surprisingly strong. "Orders are clearly better," he said. "We're starting to see replacement-driven orders in Europe, so I think that bodes well for this year for those who have been worried about Europe."
Volvo's operating profit fell in the quarter to 14.04 billion crowns ($1.28 billion) from a year-earlier 16.98 billion against a mean forecast in an LSEG poll of analysts of 14.51 billion, on a sales drop of 6 per cent.
Volvo repeated a 2025 market forecast from October for sales of 290,000 heavy trucks in Europe, and 300,000 in North America. Volvo proposed an ordinary dividend for 2024 of 8.00 crowns per share, up from 7.50 crowns for 2023, and an unchanged extra dividend of 10.50 crowns, roughly matching expectations.
Volvo is the first of the European truck makers to report fourth-quarter results. Rivals Traton and Daimler both publish earnings reports in March.
Updated 16:58 IST, January 29th 2025