By Scott Kanowsky
Investing.com -- AB Volvo (ST:VOLVb) has reported better than expected second quarter profit and revenue, sending shares higher, as improving demand for the Swedish truck maker's vehicles helped offset rising costs.
Earnings per share for the period rose to SEK 5.14, above estimates of SEK 4.53, while net sales jumped by 31% to SEK 118.9B. Analysts had anticipated the top line figure to come in at 106.96B.
In a statement, Volvo said it saw "good momentum" in vehicle sales, as well as strong performance at its financial services division. Foreign exchange movements also contributed an additional SEK 2.77B to operating income.
However, expenses climbed during the quarter due to supply chain delays and higher material costs.
The Gothenburg-based company's president and chief executive Martin Lundstedt said in a statement that steps had been taken to "mitigate" these issues but warned that uncertainty still lies ahead for the supply of key components like semiconductors needed in the production of trucks and other parts. Lundstedt added that Volvo will see continued "disruptions and stoppages" to its future output.
The results come as Volvo Group also moves to scale back its operations in Russia following the outbreak of the war in Ukraine. Earlier this month, Reuters reported that the group would start laying off some staff in the country but had yet to decide if it would completely shutter its Russian business.
In February, Volvo Group halted sales, service, and production in Russia - which made up about 3% of net sales in its previous financial year.
Shares in Volvo Group are lower by more than 18% over the one-year period.