Volvo (VOLVb.ST), the Swedish truck manufacturing giant, beat expectations in its second-quarter earnings, thanks to signs of recovery in the European market, which helped cushion a steep downturn in North America.
Volvo reported a second-quarter adjusted operating profit of 13.5 billion Swedish crowns ($1.39 billion). This figure slightly surpassed the 13.3 billion crowns expected by analysts surveyed by LSEG.
“The results are better than feared, but the heat does appear to be coming out of Europe,” analysts at Jefferies wrote.
North America Slump Continues
Truck orders in North America have plummeted by more than 40% in recent months compared to the previous year. This has created downward pressure on both pricing and market sentiment. CEO Martin Lundstedt acknowledged that the North American downturn could persist for several more quarters.
However, he suggested that 2026 could see a pre-buy boost if the U.S. clarifies new emissions regulations set to begin in 2027. These new rules are expected to make trucks costlier and more complex to maintain.
Despite the slump, Volvo is seen as better positioned than some competitors due to its significant local truck production, which helps avoid import-related costs and U.S. tariffs.
Steady Demand in Europe
Volvo said the European market showed signs of stabilization during Q2. Lundstedt expressed confidence that this positive trend would continue into the second half of the year.
“We have full order coverage through Q3 and see bookings coming in for Q4,” he said.
Truck order intake during the quarter was 47,761 vehicles, close to last year’s level. Deliveries, however, dropped 10.5% to 52,764 units. Analysts at J.P. Morgan anticipate an improvement in European deliveries later in 2025.
Lundstedt also pointed to future tailwinds from expected infrastructure and defense investments across Europe.
Market Reaction
Volvo shares rose more than 3% in early trading but leveled off by 0945 GMT, remaining mostly flat.
Currency Note: $1 = 9.7384 Swedish crowns
