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Volvo nearly doubles its net income year-over-year

22 Nov 2017 | 2 min read
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In the third quarter 2017 Swedish Volvo Group nearly doubled its net income on a year-over-year basis. Especially, the truck orders and the construction equipment orders provided strong growth. In North America Volvo moved ahead with its renewal of the truck portfolio.

Swedish utility vehicle manufacturer Volvo nearly doubled its net income in the third quarter on a year-over-year basis. The one-off sale of Deutz contributed to this increase, while currency movements had a negative impact on the overall results. Another interesting fact is that Volvo is renewing its portfolio by launching new truck models in North America. In this regard, Martin Lundstedt, CEO of Volvo, says that “from an overall perspective, market demand is strong […]”.

Lundstedt further thinks that the truck demand will remain strong on a full year perspective and has raised the projections for Europe, North America and China.

Strength in truck business provides growth

Especially in the truck business Volvo kept on track. Truck deliveries were up by 13 percent year-over-year in the third quarter with higher volumes in all regions.

The Volvo Group is a Swedish utility vehicle manufacturer and must not be confused with the car manufacturer Volvo Car Corporation which was withdrawn from Volvo Group in 1999. On Top Volvo produces construction equipment and power engines. The Volvo Group has approximately 95,000 employees all over the world.

Volvo with boost in net income

Volvos third quarter revenue equals EUR 8.08 billion. The EBITDA yields with a margin of 23.6 percent and equals EUR 1.08 billion. Net income equals about EUR 519 million, which is an increase of 80.8 percent compared to the third quarter 2016. Earnings per share grew on a year-over-year basis to EUR 0,26. Besides these results, future developments are still expected.

At the moment Volvo B-shares are traded at EUR 15.78 (20.11.2017). The stock reached its annual high at EUR 17.45 (27.10.2017) and its low at EUR 10.79 (02.01.2017). Bloomberg analysts estimate a price-earnings-ratio of 15.43 and a dividend yield of 2.05 percent. 10 analysts rate Volvo on Buy, 7 on Hold and 4 on Sell. Volvos current market capitalization equals EUR 26.59 billion.

The future share performance will depend on various corporate-, industry- and economic factors. Investors should consider the risks before taking any investment decisions. The performance of the underlying might differ from investors’ expectations and lead to a potential capital loss

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