Investing.com – Volvo (OTC:) Cars (ST:) reported first-quarter operating profit that was below expectations, citing foreign exchange headwinds and lower contract manufacturing sales.
The carmaker announced that earnings before interest and taxes fell to SEK 4.7 billion in the three months ended March, down 8% from the corresponding period last year. Consensus estimates put the investment at SEK 5.93 billion, Reuters reported, citing JPMorgan estimates.
Shares in the Swedish group fell in early European trading on Wednesday.
But CEO Jim Rowan said demand is expected to “remain strong” in the coming quarters, in line with the company’s forecast for full-year sales growth of at least 15%.
The company added that it expects the number of all-electric vehicles in its new vehicle launches to be “significantly” higher than in 2023. Rowan said Volvo Cars was confident profits from electric vehicles would continue to rise despite the recent decline in consumer demand for them. Electric vehicles and the rising costs associated with technology development.
Battery electric vehicle gross margins were 16% in the first quarter, up from 13% in the previous quarter.