Quarter three sales reports have come out from truck manufacturers and some of them are not so good. Volvo group’s profits dropped by around 28% in this third quarter. This is aligned with the drop in demand that we have already been seeing in across North America and Europe. The decline in demand and sales has been heavily felt by the company as we have seen the revenue margins dropping over time. Additionally affecting Volvo group currently is the fact that they purchased Mack Trucks brand and are still undergoing the overtaking of the business.
Volvo’s quarter three profit breaks down to about 47 centers per diluted share.
Last year in this period, Volvo had a profit of $1.34 billion. Now, they announced only having $956.6 million. Last year’s numbers broke down to about 66 cents per diluted share. This shows a clear sign of steadily declining profits for the company. However, despite the clear decline, Volvo assures people that these were all expected declines and that they are now regulating out and expect to hold steady for a while now. The CEO of Volvo, Martin Lundstedt, released a statement saying “In Q3 2024, demand continued to normalize in most of the Volvo Group’s markets. We see that transport and construction activity has decreased in many regions around the world compared to the very high levels last year.” Volvo stands firm behind the notion that they have reached a regulatory point and will remain with profit margins of this level for a fit unless demand increases.
Volvo’s operating margin also shows a decrease from this year compared to last year.
This year, they released information showing the operating margin for quarter three was 2%. Last year, the operating margin was 13.8%. Furthermore, to compare it to earlier this year, this year’s quarter two margins were at 14.5%.
To continue on this downward trend, order intake took a massive nosedive this quarter. In quarter three, order intake in North America decreased by 50%. They had orders for a little over 8,600 trucks this year, which is a decrease from around 17,300 trucks. The company leaders suspected Mack as being part of the issue, which is what ultimately led to the Mack buy out.
The CEO and other leaders have expressed hope in getting their numbers back up soon. With the holidays coming up and online purchasing and shipping increasing, it is possible to see a sharp increase in orders for the truck manufacturer.