AB Volvo says order intake jumped 61% in the fiscal third quarter
- AB Volvo says order intake jumped 61% in the fiscal third quarter.
- The Swedish company reports £630 million in adjusted operating profit.
- The truckmaker forecasts dovish performance for full fiscal 2020.
AB Volvo (STO: VOLV-B) said on Friday that its core earnings in the fiscal third quarter came in stronger than forecasts. The company also revealed a significant increase in order intake in the recent quarter after months of halt due to the Coronavirus pandemic.
AB Volvo jumped 3.5% in premarket trading on Friday but lost half of the intraday gain on market open. Including the price action, shares of the company are now trading at £15.78 versus a lower £14.08 per share at the start of 2020. Interested in investing in the stock market online? Here’s a simple guide to get you started.
AB Volvo reports £630 million in adjusted operating profit
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Volvo said that order intake jumped 61% on a year over year basis in Q3 to 57,530 trucks. In terms of operating profit, the company reported £630 million on an adjusted basis versus a much higher £950 million in the same quarter last year. According to Refinitiv, however, experts had predicted an even lower £510 million of operating profit for the Swedish truckmaker in the third quarter.
In the prior quarter (Q2), AB Volvo had recorded £286.44 million of adjusted operating profit. CEO Martin Lundstedt commented on the report on Friday and said:
“In the last two quarters, our organisation and business partners have shown great volume flexibility by first handling a dramatic volume decline and then a steep recovery with maintained good productivity.”
In early April, when the impact of the COVID-19 crisis was at its peak, AB Volvo was pushed into temporarily shutting down several of its production facilities resulting in negative net order intake.
AB Volvo’s forecasts for the full financial year
The CEO, however, warned that performance could take a hit in the upcoming months if the worldwide rise in new COVID-19 cases pushes governments into imposing new restrictions. Volvo’s results came in a day after its rival, Daimler, reported a better than expected rebound in third-quarter sales.
For the full fiscal year, Volvo forecasts a 30% decline in European heavy truck market registrations and an even broader 35% decline in the U.S. But in fiscal 2021, it expressed confidence that a 7% growth in Europe and 14% in the United States was likely
At the time of writing, the Swedish multinational manufacturing company has a market cap of £32 billion and a price to earnings ratio of 19.78.