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Truckmaker Volvo reports Q4 adjusted operating profit miss

Published 2023/01/26, 10:20

By Scott Kanowsky 

Investing.com -- Volvo AB (ST:VOLVb) has posted lower-than-expected income in the fourth quarter, as elevated input expenses and lingering supply chain disruptions partly offset a surge in net sales.

Adjusted operating profit at the Swedish truckmaker increased by 20% to SEK12.17 billion ($1 = SEK10.20) during the final three months of 2022, up from SEK10.06B in the prior year but below Bloomberg consensus estimates of SEK12.44B. Adjusted operating margin also slipped to 9.1% from 9.8%.

"Costs related to energy, material and supply chain disruptions continue to be high, and we work actively to try to compensate for these effects," said chief executive officer Martin Lundstedt in a statement.

Lundstedt also flagged that uncertainty still remains around the macroeconomic environment, particularly from high inflationary pressures and "geopolitical turmoil." Despite these headwinds, quarterly net sales jumped by 31% to a better-than-anticipated mark of SEK134.3B.

The need to renew aging fleets, as well as "high transport and infrastructure activity," helped boost customer demand, Volvo said. The company delivered 62,800 trucks in the fourth quarter, a rise of 4% year-on-year and a record level for the timeframe.

However, Lundstedt warned that the firm has been "restrictive in slotting orders for production too far into the future" in order to control costs and order book quality. As a result, net order intake fell by 21% to 54,100 trucks.

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