Volvo beats second quarter earnings expectations
Lorry manufacturer sees costcuts and rising European sales boost earnings
Updated : 14:50
Volvo released better than expected second quarter earnings on Tuesday, despite shrinking US demand for commercial vehicles.
The Swedish lorrymaker provides heavy duty vehicles across Europe and in the USA, with the former currently driving the earnings for the quarter.
The company scaled back its outlook for North America, saying it expected industry wide sales of 240,000 trucks, down from a forecast for 250,000 given in April.
"In the second quarter we were able to continue the improvement of our underlying profitability despite declining sales, thanks to positive cost development," said CEO Martin Lundstedt.
Lundstedt is a former boss of rivals Scania, which for a long time boasted some of the best profit margins in the industry.
Volvo shares rose 0.8% by on Tuesday morning, outpacing a 0.7% fallin the STOXX Europe 600 Industrial Goods & Services Index. The stock is up 12 percent so far this year compared with a 2% drop for the index.
"The results tells us that Volvo are on track to boost its earnings generation capacity also when demand is not great," said Danske Bank analyst Bjorn Enarson.