Truckmaker Volvo Sees Glimmer of Hope in Q4 Orders
Despite missing profit expectations, Volvo’s shares surged as much as 6% on Wednesday, driven by a surprising 24% jump in fourth-quarter orders. This uptick in demand offers a glimmer of hope for a less dismal 2025, particularly in Europe, which is expected to be hit hard by the ongoing slowdown in the truckmaking industry.
European Orders Shine Bright
The standout performer in Volvo’s Q4 results was Europe, where orders soared 37%. This significant increase is attributed to replacement-driven demand, a trend that bodes well for the year ahead. According to Handelsbanken analyst Hampus Engellau, “Orders are clearly better… We’re starting to see replacement-driven orders in Europe, so I think that bodes well for this year.”
CEO Remains Cautious
While the Q4 orders provide a welcome boost, Volvo’s CEO Martin Lundstedt remains cautious, reiterating the company’s 2025 market forecast for sales of 290,000 heavy trucks in Europe and 300,000 in North America. Lundstedt emphasized the need to wait and see how the market stabilizes, citing the risk of over-swing when demand picks up.
Profit Margins Squeezed
Volvo’s operating profit fell to 14.04 billion Swedish crowns ($1.28 billion) in Q4, below analyst expectations. The decline was attributed to lower sales volumes, continued investments, and extra costs in North America related to supply chain issues. The company was also affected by Hurricane Helene, which hit southeastern U.S. states where it has a large supply base.
Dividend Proposal
Volvo proposed an ordinary dividend for 2024 of 8.00 crowns per share, up from 7.50 crowns for 2023, and an unchanged extra dividend of 10.50 crowns, roughly matching expectations.
Industry Outlook
As the first major European truckmaker to report Q4 results, Volvo’s performance sets the tone for its rivals. German competitors Traton and Daimler are set to publish their earnings reports in March, having already reported declining 2024 sales earlier this month.
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