Volvo AB blasted a klaxon for investors on Wednesday.
The Swedish truck and heavy equipment maker announced surprisingly strong preliminary profits for the first three months of 2023. Full results arrive next week. Notably, operating margins for trucks and construction equipment hit record highs at 14.2 per cent and 18.3 per cent, respectively, exceeding analysts’ expectations. Volvo’s share price rose 8 per cent in response, lifting those of its peers in sympathy.
Closely tied to the economic cycle, truckmakers have steered a bumpy road of late. But as fears of a severe economic contraction have lessened, shares in European truck markets have rallied. Volvo shares were already up by a fifth over the past six months, in line with Daimler Truck though behind gains for Volkswagen spin-off Traton.