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(Sharecast News) - Shares in Volvo Car rocketed on Thursday after the Swedish auto group returned to sales growth in September and posted higher profits for the third quarter, helped by recent restructuring and cost-cutting efforts.
The company, which is 78.7%-owned by Chinese auto conglomerate Geely Holding, reported revenues of SEK86.4bn for the three months to 30 September, down 7% year-on-year, due to lower wholesale volumes and unfavourable foreign exchange rate movements due to a stronger Swedish krona. This was partially offset by sales mix and pricing benefits, as well as used car sales.
However, the carmaker said it return to "modest" retail sales growth in the final month of the quarter, helped by by all-time high performances in the UK, Austria, Turkey, Canada, Brazil and Mexico.
The overall revenue results was comfortably ahead of the SEK81.3bn expected by analysts.
Meanwhile, net income totalled SEK5.20bn, up from SEK4.21bn the year before, swinging into a profit after restructuring and impairment costs pulled the company into the red for the second quarter.
While the company spend more on R&D than last year, selling and admin expenses reduced significantly due to lower personnel costs and reduced spending on advertising and sales promotions, and lower IT costs.
"In a tough market we delivered a solid third-quarter result and our cost and cash actions are delivering," said chief executive and president Hkan Samuelsson.
"We returned to a slight sales growth in September and we are now ramping up sales of our BEV cars. We are fully on track towards the very important January launch of the EX60 in the largest and most popular electric segment."
By 1508 in Stockholm, the stock was up 34% at SEK30.54.
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