Volvo Group sees modest Q3 recovery – FreightWaves

Sweden’s Volvo Group (OTC: VLVLY) reported lower sales and income in the third quarter. But the gap compared to year-ago results narrowed with rebounding truck orders responding to strong freight demand.

Third-quarter net sales fell 16% to SEK 76.9 billion ($8.71 billion) compared to SEK 98.7 billion ($11.18 billion). Adjusted operating income was SEK 7,217 million ($816.73 million) compared to SEK 10,885 million ($1.23 billion) in the year-ago quarter. The adjusted operating margin was 9.4% compared with 11%.

Weak second-quarter orders due to pandemic-forced plant shutdowns impacted third-quarter deliveries across all of Volvo Group’s businesses — trucking, construction, buses and engine manufacturing.

“The uncertainty about the future economic development and demand for our products is considerable as an increase in the spread of COVID-19 can lead to new restrictions on societies and businesses,” Volvo Group President and CEO Martin Lundstedt said.

Truck orders rebound and market share rises

Orders for Volvo and Mack-branded trucks in North America rose 151% to 12,441 trucks with demand led by regional- and long-haul trucks responding to increased pandemic-driven freight demand for consumer goods. 

However, deliveries fell 57% to 6,121 trucks with Volvo down  26% and Mack off 59%. Still, Volvo Trucks’ heavy-duty truck market share through September increased to 9.5% compared with 9.3% a year ago. Mack Trucks’ market share increased to 7.0% from 6.8%. 

Mack recalled 230 laid-off workers in August at its Pennsylvania manufacturing plant as orders grew 36% to 4,840 from 3,549 a year ago. Volvo Trucks bookings rose 84% to 36,473 from 19,823.

“Toward the end of the quarter transport activity was back on roughly the same level as a year ago in most markets,” Lundstedt said. “After the easing of COVID-19 restrictions, freight activity has increased and customers are returning to previously planned replacement cycles.”

As of Sept. 30, Volvo had 96,229 employees, including temporary employees