Swedish truck maker AB Volvo (publ) on Oct. 18 reported better-than-expected earnings for the third quarter but warned of weakening demand as reflected by a year-over-year slump in net order intake for trucks.
Volvo's net order intake for trucks plunged 45% to 35,726 in the quarter from 65,348 in the prior-year period. The company's President and CEO Martin Lundstedt acknowledged the weakness, saying "demand for new vehicles is declining, and we are facing a period of tougher market conditions."
Lundstedt said customers in Europe and North America who expanded their truck fleets in recent years are now holding back on investments due to economic uncertainty.
"For 2020, we expect markets to come down to more normal replacement levels in both Europe and North America, which we have prepared ourselves for," Lundstedt said in a quarterly report.
Volvo booked income of 7.55 billion Swedish kronor in the quarter, compared with 7.52 billion kronor in the year-ago period. The company's EPS was flat year over year at 3.67 kronor, but higher than the S&P Global Market Intelligence consensus EPS estimate of 3.62 kronor in the third quarter.
Net sales rose to 98.72 billion kronor in the quarter from 92.28 billion kronor a year earlier.
Volvo's third-quarter operating income rose year over year to 10.89 billion kronor from 10.25 billion kronor.
As of Oct. 17, US$1 was equivalent to 9.71 Swedish kronor.