STOCKHOLM (Reuters) -Sweden’s AB Volvo beat third-quarter core earnings expectations on Thursday 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 in a statement.
It also cautioned that 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.
Volvo, a rival of Germany’s Daimler and Traton, said order intake of its trucks, including brands such as Mack and Renault, fell 4% from a year earlier.
Volvo said it expected European heavy truck market registrations to rise to 280,000 trucks in 2021, and grow to 300,000 trucks next year.
It expects the U.S. market to rise to 270,000 trucks this year, and grow to 300,000 trucks in 2022.
It had previously forecast registrations in both Europe and the United States at 290,000 trucks this year.
Adjusted operating profit at the maker of trucks, construction equipment, buses and engines rose to 9.40 billion Swedish crowns ($1.09 billion) from 7.22 billion a year earlier, beating the 8.87 billion expected by analysts, Refinitiv Eikon data showed.
A global shortage semiconductor shortage has hit large swaths of the manufacturing sector, not least the vehicles industry, and has prevented Volvo from fully capitalising on robust demand.
Daimler Trucks said this month it would continue to sell fewer vehicles than it could have in the coming year as chip shortages hamper production.
($1 = 8.5917 Swedish crowns)
Reporting by Helena Soderpalm; editing by Niklas Pollard and Jason Neely