Volvo Stock Zig-Zags After Swedish Carmaker Posts Sharp Drop in Operating Profit

Geely-owned company reported $1 billion in operating losses — a sharp downturn from last year’s quarterly profit of about $800 million. Is it the tariffs?

🚗 Profit Crash, Stock Whiplash

• Volvo stock (ticker: VOLV_A) was in for a bumpy ride Thursday morning. Second-quarter profit skid off the road — the Swedish automaker posted a $1 billion operating loss (that’s 10 billion Swedish kronor), flipping hard from an $800M (8 billion Swedish kronor) profit last year. Analysts expected a profit. Volvo gave them a cold bucket of Swedish disappointment instead.
• Despite the surprise loss, shares initially jumped 9% after the company beat drastically lowered expectations. Then reality set in — and the stock swerved back to the flatline a couple hours into the cash session.
• It’s Volvo’s first operating loss since going public in 2021. Blame tariffs, restructuring, and that uncomfortable macroeconomic squeeze choking global car demand.

📉 Revenue Slides, Tariffs Rise

• Revenue fell 8% to 93.5 billion kronor as retail sales slipped across key markets like China and Europe. Turns out, high interest rates and economic fog don’t pair well with new car smell.
• US tariffs are hitting where it hurts. Geely, Volvo’s Chinese parent, is now navigating a trade war pothole map — and Washington’s not handing out detour signs.
• Chairman Håkan Samuelsson said demand is under pressure from “macroeconomic headwinds” and “tariff-related uncertainties.” Translation: it’s a tough time to be a carmaker whose key markets are hit by trade war jitters.

🛠️ Industry Gears Up for a Rough Ride

• Volvo’s bleak results may be just the opening scene. Analysts are bracing for a tough earnings season in the auto world as costs rise and demand idles.
• On another note, EV hopes haven’t vanished, but the road to profitability is looking longer — and more expensive — than many carmakers (and investors) had mapped out.
• With margins narrowing and consumer sentiment in reverse, even solid brands like Volvo are finding it tough to keep traction. Buckle up — it’s going to be a bumpy quarter.