Volvo's net profit falls almost threefold

On Friday, Swedish truckmaker Volvo reported third-quarter core earnings well above forecasts and a big order intake jump as its recovery from a deep COVID-19-induced slump continued to gain pace.

Volvo's news, which had initially scheduled its earnings report for Oct. 20, followed forecast-beating results from rival Daimler AG DAIGn.DE on Thursday.

Volvo said net order intake in the July-September quarter amounted to 57,530 trucks, up 61% from a year earlier.

Adjusted operating profit at the maker of trucks, construction equipment, buses, and engines fell to 7.22 billion crowns ($813 million) from 10.89 billion a year earlier but was well above the 5.82 billion expected by analysts, Refinitiv Eikon estimates showed.

"In the last two quarters, our organization and business partners have shown great volume flexibility by first handling a dramatic volume decline and then a steep recovery with maintained good productivity," CEO Martin Lundstedt said in a statement.

The rebound has been sharp for Volvo, which was forced to halt production across many of its plants in the spring due to the pandemic and which even had negative net order intake in early April.

"All in all, a robust quarter for Volvo, with very healthy earnings performance and increasing business momentum globally," JP Morgan analysts said in a research note.

Volvo's Lundstedt voiced some caution on the outlook.

"The uncertainty about future economic development and demand for our products is considered as an increase in the spread of COVID-19 can lead to new restrictions on societies and businesses," he said.

However, the Gothenburg-based company reintroduced its market forecasts, which were pulled earlier this year due to the pandemic.

Volvo said it expected European heavy truck market registrations to fall by 30% in 2020 and grow by some 7% next year. It expects the U.S. market to fall by 35% this year and grow by 14% in 2021.