Construction equipment and commercial truck manufacturer Volvo Group saw a steep sales drop in the second quarter, although its construction segment was a silver lining.
In North America, where net sales fell nearly 20% year over year, Volvo’s truck business is being hampered by a “wait-and-see mood among customers” amid tariff uncertainty, President and Chief Executive Martin Lundstedt said during today’s earnings call.
“We are, therefore, continuing to adjust production levels for Group Trucks in North America to minimize the under-absorption in production going forward,” he said. “And that work is ongoing in good pace here.”
BY THE NUMBERS: Gothenburg, Sweden-based Volvo Group reported in Q2:
- Net sales totaled 122.9 billion Swedish krona ($12.6 billion), down 12.4% YoY;
- Operating income dropped 51% YoY to $1 billion;
- Diluted earnings per share of 37 cents, down 52.4% YoY;
- Net truck orders totaled 47,761, an increase of one unit YoY;
- Truck deliveries fell 10.5% YoY to 52,764;
- Net orders for construction equipment jumped 23.7% YoY to 16,720;
- Construction equipment deliveries rose 11.4% YoY to 16,987;
- EV truck orders increased 53% YoY to 1,002 units; and
- EV truck deliveries fell 6.7% YoY to 1,029.
Despite the spike in EV truck orders, slower than expected adoption affected operating income as Volvo incurred costs of $461.1 million “related to compensation for lower battery-volume commitments and impairment of some battery-electric assets,” Lundstedt stated in its earnings release.
Meanwhile, Volvo Construction Equipment is poised for continued growth after investing $260 million to increase crawler excavator production in South Korea, Sweden and North America. The investment will help the company “meet growing customer demand, strengthen the regional supply chains and come closer to customers with shorter lead times,” Lundstedt stated.
Editor’s note: All amounts have been converted to U.S. dollars.
