Sweden’s AB Volvo reported second-quarter core earnings slightly below market expectations on Tuesday as the truckmaker juggled strong demand for its vehicles with intense pressure on its supply chain from a global chip shortage.
Adjusted operating profit at the maker of trucks, construction equipment, buses and engines rose to 9.73 billion Swedish crowns ($1.12 billion) from 3.27 billion a year ago, undershooting the 9.84 billion seen by analysts according to Refinitiv data.
A global shortage of semiconductors just as the market roared back after last year’s pandemic plunge has squeezed makers of heavy-duty trucks as well as smaller vehicles, crimping production, extending lead times and lifting costs.
Volvo, a rival of Germany’s Daimler and Traton, said it struggled with substantial production stoppages as a result in the second quarter.
Meanwhile, demand for heavy-duty trucks is strong with a surge in online shopping due to the pandemic driving freight volumes and rates, emboldening fleet operators to move ahead with vehicle orders put on hold after the virus first struck.
Volvo said order bookings of its trucks, sold under brands such as Mack and Renault as well as its own name, soared 143% from a weak year-ago quarter and stood by forecasts for solid market growth in both Europe and North America this year.