Sweden’s AB Volvo has reported a bigger-than-expected rise in quarterly core earnings as stronger demand for heavy trucks more than offset costs stemming from strains on its supply chain, sending its shares to a record high.

Sweden’s biggest manufacturer by sales also raised its outlook for truck markets on both sides of the North Atlantic this year and forecast a further strong recovery in sales of commercial vehicles in North America in 2018.

“These are blow-out numbers,” said analyst Hampus Engellau at Handelsbanken Capital Markets, which rates the stock “buy”.

Volvo and rivals in the truck industry such as Germany’s Daimler and Volkswagen have hit a sweet spot this year, with rising or already robust demand in all major commercial vehicles markets.

The broad upturn in demand was also in evidence in Daimler’s quarterly results, also released yesterday, with a double-digit rise in deliveries and a 32 per cent jump in earnings at its trucks division.

Yet the buoyant demand has also come at a cost, with pressured supply chains leading components maker SAF-Holland to scale back its 2017 margin outlook this month, while Volvo’s profitability was dented in the second quarter.

Volvo said stretched components supply had continued to have an impact in the third quarter, but with a 13 per cent rise in truck deliveries and sharply higher earnings in its construction equipment arm, this was shrugged off.

CEO Martin Lundstedt, a former boss at rival Scania, said the bottlenecks that had mainly hit European truck manufacturing had eased somewhat in recent months, along with supplies of components for powertrains, or engines and axles.