Key Highlights
- Operating income on an adjusted basis reached SEK 14.78 billion in Q2 2026, compared to SEK 13.48 billion in the prior-year quarter.
- The adjusted operating margin expanded to 11.7% versus 11% recorded in Q2 2025.
- Order intake for trucks jumped 33%, with North American demand more than doubling compared to last year.
- U.S. tariff costs totaled SEK 1.2 billion during the quarter but were balanced by robust services performance and improved market positioning.
- The company has submitted a tariff refund application under IEEPA, anticipated to counterbalance an estimated SEK 1.1 billion tariff impact in Q3.
Volvo Group delivered a robust performance in its second quarter, demonstrating profit growth and margin improvement even as tariff-related expenses escalated. Shares of the Swedish commercial vehicle manufacturer’s VOLVb stock were hovering near SEK 338.20, declining 0.91% during the session, although the fundamental results painted a brighter picture.
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On an adjusted basis, operating income totaled SEK 14.78 billion, representing an increase from SEK 13.48 billion in the corresponding quarter of the previous year. The company’s adjusted operating margin climbed to 11.7% from 11%.
Revenue advanced 3% to SEK 126.27 billion, with organic expansion of 7%. Vehicle revenue posted 6% organic growth while service revenue increased 7%.
Reported operating income climbed to SEK 13.48 billion from SEK 9.96 billion, with the reported margin standing at 10.7%, up from 8.1% in the year-ago period.
Earnings per share reached SEK 5.10, an increase from SEK 3.64 the previous year. Cash flow from operations in Industrial Operations improved to SEK 5.84 billion from SEK 2.95 billion.
Return on capital employed stood at 26.8%, demonstrating efficient capital allocation throughout the organization.
Robust Truck Demand
The order book showed particularly impressive strength in the truck division. Net orders surged 33% to reach 63,412 units. North American demand more than doubled on a year-over-year basis, while European and South American markets showed steady recovery.
Total truck unit deliveries increased 6%. The Trucks division generated revenue of SEK 86.85 billion, up 6%, while its adjusted operating margin improved to 11.2% from 10.3%.
Chief Executive Martin Lundstedt noted that the performance gains materialized despite challenges from U.S. tariffs and elevated freight and materials expenses, which were successfully counterbalanced by enhanced service operations, favorable brand positioning and market composition, along with reduced research and development spending.
“Profitability reached its highest level in recent quarters,” Lundstedt added.
Navigating Tariff Challenges
The net impact from U.S. tariffs amounted to a negative SEK 1.2 billion in Q2, with more than half affecting the Construction Equipment division. This represents a significant increase from the SEK 0.2 billion in tariff-related costs incurred a year prior.
Construction Equipment revenue declined 6% to SEK 21.60 billion, partially attributable to the SDLG divestiture, though organic revenue climbed 13%. The division’s adjusted operating margin strengthened to 14.4% from 13.1%.
Buses division revenue remained essentially unchanged at SEK 6.07 billion, with the adjusted margin ticking up to 8.2% from 7.9%.
Volvo Penta represented the primary area of weakness. Revenue remained largely flat at SEK 5.43 billion, but its adjusted operating margin contracted to 16.7% from 20.7%, driven by reduced volume and elevated cost pressures.
Following the quarter’s conclusion, Volvo Group submitted an application for tariff refunds under the International Emergency Economic Powers Act. Management indicated it anticipates the refund to be recorded in Q3 2026 and to neutralize a projected SEK 1.1 billion negative tariff effect on operating income.
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