Mikael Sjöberg | Bloomberg | Getty Images
Swedish Volvo Cars Group reported stronger-than-expected third-quarter profit on Thursday, helping its shares rebound about 40% and putting the stock on track for its best trading day ever.
Volvo Cars, which is owned by China’s Geely Holding, reported an operating profit for the July-September period of 6.4 billion Swedish crowns ($680.4 million), well above analysts’ expectations and up from 5.8 billion crowns a year earlier.
Its earnings before interest and tax (EBIT) margin stood at 7.4% for the third quarter, compared to 6.2% in the same period last year.
Volvo Cars said the result was largely due to its ongoing 18 billion crown cost savings program, as well as some one-off items.
The Stockholm-listed share price jumped 41% on Thursday morning, before paring its gains. This reflects the company’s biggest intraday gain since it began trading four years ago.
“In a difficult market, we delivered a strong third-quarter result and our cost and cash flow measures are paying off,” Håkan Samuelsson, CEO of Volvo Cars, said in a statement.
“We returned to modest sales growth in September and are now accelerating sales of our BEV cars. We are well on our way to the very important January launch of the EX60 in the largest and most popular electric segment,” he added.
Looking ahead, Volvo Cars said it expects to see more positive effects from its cost-cutting campaign in the last three months of the year.
He noted, however, that the near-term outlook appears increasingly difficult, citing lingering macroeconomic challenges, including price competition and the effects of U.S. tariffs on imports.
