AB Volvo (VOLVb.ST) reported record first-quarter profit, a preliminary filing showed, as the truck maker boosted its revenue and margins despite supply bottlenecks and cost inflation, sending its shares up 9.6 per cent in early trade on Wednesday.

Its adjusted operating profit rose 45 per cent to 18.4 billion Swedish crowns ($1.76 billion) for the January-March quarter, well above the 12.9 billion expected by analysts polled by Refinitiv Eikon.

The Swedish company had said as recently as January it expected “disturbances, stoppages and extra costs” to persist, with soaring inflation and the energy crisis adding to the pain.

Volvo did not elaborate on what had spurred its turnaround and did not provide a profit outlook in its preliminary earnings which were released late on Tuesday. It declined to comment further.

“We believe this quarter was influenced by price increases and (a) much better supply chain situation leading to less stop and go on the production line allowing the firm to deliver very strong results,” analysts at JPMorgan said in a research note.

Volvo shares were up 8.0 per cent at 210 crowns as of 0725 GMT versus a 0.8 per cent rise in Stockholm’s benchmark share index.

Volvo and rivals such as Germany’s Daimler Truck (DTGGe.DE) and Traton (8TRA.DE) have struggled with semiconductor shortages and broader supply chain issues and strained freight capacity stemming from the COVID-19 pandemic and the war in Ukraine.

Volvo’s results could signal a broad improvement for the industry, with a particularly positive “read across” to Daimler Truck, Traton and Italy’s Iveco (IVG.MI) as well as for their suppliers, JPMorgan said.

Shares in Daimler Truck and Traton were up 3.5 per cent while Iveco was 2.3 per cent higher.

Jyske Bank in a research note said that while the earnings were strong, the brokerage still worried that Volvo’s order intake could fall and that the truck maker’s customers could see stagnant activity amid global economic weakness.

Volvo’s preliminary net sales for the quarter rose to 131.4 billion crowns from 105.3 billion and topped the 118.6 billion expected by analysts.

Its adjusted operating margin rose to 14.0 per cent from 12.0 per cent and earnings at the group’s two major divisions, truck making and construction equipment, both showed progress.

Net sales in the truck segment rose to 89.6 billion crowns from 69.6 billion, beating a forecast of 79.7 billion.

The division’s operating profit jumped to 12.7 billion from 8.7 billion while analysts expected a decline to 8.4 billion.

Daimler Truck last month said its outlook had improved and that its profit would grow this year, but the company’s share price still fell amid concerns that inflation would weigh on its margins.

($1 = 10.4303 Swedish crowns)