Volvo Q2 profit rises as truck demand, services outweigh tariff hit

Volvo Group AB’s (ST:VOLVb) adjusted operating income rose to SEK 14.78 billion in the second quarter from SEK 13.48 billion a year earlier, as stronger European and North American truck demand and a stronger service business offset higher U.S. tariff costs, the Swedish truckmaker said on Friday.

The adjusted operating margin was 11.7%, up from 11% in the second quarter of 2025. Net sales increased 3% to SEK 126.27 billion from SEK 122.90 billion, with organic sales growth of 7%. Vehicle sales grew 6% organically and service sales grew 7%.

“This improvement was achieved despite headwinds from net US tariff costs as well as higher freight and material costs. These were more than offset by a stronger service business, a favorable brand and market mix as well as lower net R&D expenses,” said President and CEO Martin Lundstedt in a statement.

Net order intake for trucks surged 33% to 63,412 vehicles. Orders in North America more than doubled year-over-year, while demand in Europe and South America grew gradually, the company said. Total truck deliveries rose 6%.

During the quarter, the net U.S. tariff impact was SEK 1.2 billion negative, with just over half affecting the Construction Equipment segment, compared with SEK 0.2 billion in tariff costs a year earlier.

Reported operating income was SEK 13.48 billion, compared with SEK 9.96 billion a year earlier, corresponding to an operating margin of 10.7%, up from 8.1%.

Costs totaling SEK 1.31 billion were excluded from adjusted operating income in the quarter, including a negative effect of SEK 1.83 billion related to Volvo Group North America’s settlement with the California Air Resources Board, partly offset by a positive effect of SEK 405 million from the divestment of the Flexis joint venture, and a positive effect of SEK 119 million from the reversal of previously recognized restructuring charges tied to the European bus operation.

Earnings per share were SEK 5.10, compared with SEK 3.64 a year earlier. Operating cash flow in the Industrial Operations was SEK 5.84 billion, compared with SEK 2.95 billion, which the company said was primarily an effect of higher operating income and lower build-up of working capital, partially offset by increased income taxes paid.

By segment, Trucks reported net sales of SEK 86.85 billion, up 6% from a year earlier, while its adjusted operating margin improved to 11.2% from 10.3%.

Construction Equipment posted net sales of SEK 21.60 billion, down 6%, reflecting the divestment of SDLG, although organic sales rose 13%. Its adjusted operating margin increased to 14.4% from 13.1%.

Buses reported net sales of SEK 6.07 billion, broadly unchanged from a year earlier, while its adjusted operating margin edged up to 8.2% from 7.9%.

Volvo Penta’s net sales were largely flat at SEK 5.43 billion, but its adjusted operating margin declined to 16.7% from 20.7%, which the company attributed to lower volumes and higher costs.