Volvo Q3 profit beats forecast, but chip woes linger

Stockholm

SWEDEN'S AB Volvo beat third-quarter core earnings expectations on Thursday (Oct 21), boosted by strong demand for its trucks even as lingering chip shortages hampered production.

Shortages of components and freight capacity had resulted in production disruptions and increased costs, Volvo said. It also cautioned it expected further disruptions and stoppages, both in truck production and in other parts of the group.

While recovering strongly, the group's sales and adjusted earnings remained below pre-pandemic levels. JP Morgan said Volvo had produced a "solid set of results", despite the disruptions. "Despite limited visibility in the supply chain and semi-conductor shortages still impacting the industry in 2H21, we expect consensus expectations to move slightly higher," the investment bank said in a note.

Volvo said order intake of its trucks, fell 4 per cent from a year earlier. Adjusted operating profit at the company, which also makes construction equipment, buses and engines, rose to 9.40 billion Swedish crowns (S$1.47 billion) from 7.22 billion a year earlier, beating the 8.87 billion expected by analysts. REUTERS