Sweden's Volvo Cars Q3 revenue drops; plans job cuts

Volvo Car AB

Today 06:13

Overview
Sweden-based automaker's Q3 revenue fell sharply yr/yr, company posted operating loss
Company cited deteriorating conditions in China and US for weaker results
Volvo Cars to cut about 2,500 jobs globally as part of new cost-saving plan

Outlook
Volvo Cars expects tough market conditions in China to persist for the next two years
Company aims to achieve SEK 5 bln in additional cost savings
Company plans to reveal three new cars in 2027, including two China-specific models

Result Drivers
CHINA MARKET - Co said hypercompetition and severe pricing pressure in China led to nearly 50% yr/yr revenue decline in the country
US TARIFFS & INCENTIVES - Co said continued negative effects from tariffs and removal of consumer incentives for electrified cars in US pressured margins
LEGISLATION & RAW MATERIALS - Negative revaluation of SEK 1.1 bln in CAFE credits due to US legislation changes and negative raw material developments affected Q3 results

Company press release: ID:nWkr79nBLt

Key Details
Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Revenue
 
SEK 66.9 bln
 
Q3 Adjusted EBIT
 
-SEK 3.7 bln
 
Q3 Adjusted EBIT Margin
 
-5.6%
 
Q3 Loss Per Basic Share
 
SEK 1.63
 

Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 8 "hold" and 4 "sell" or "strong sell"
The average consensus recommendation for the auto & truck manufacturers peer group is "buy."
Wall Street's median 12-month price target for Volvo Car AB is SEK15.10, about 7% above its October 22 closing price of SEK14.12
The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 5 three months ago

Reuters Recommended Reads
Oct 20 - Volkswagen bet on Xpeng to save its China business. It's not going to plan
Oct 21 - Auto industry bosses expect software, China growth to reshape sector by 2035, survey shows
Oct 22 - Audi gets new China leadership to face bruising competition

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)