By Dominic Chopping

STOCKHOLM--Sweden's Volvo AB reported results for the fourth quarter on Wednesday. Here's what we watched:

NET INCOME: The Swedish truck maker posted a forecast-beating fourth-quarter net profit as cost cuts more than offset a dip in sales. Net profit for the quarter ended Dec. 31 rose 38% on the year to 9.2 billion Swedish kronor ($1.10 billion), beating a FactSet analyst forecast of SEK6.41 billion. The company proposed an ordinary dividend of SEK6 a share and an extra dividend of SEK9 a share.

SALES: Sales fell to SEK96.92 billion from SEK105.4 billion a year earlier, shy of analysts' forecast of SEK97.52 billion.

WHAT WE WATCHED:

DEMAND: "There is a clear increase in demand in all our main markets and it is driven by increased freight volumes and the need to increase transport capacity to manage an increased consumption of goods," Chief Executive Martin Lundstedt said. Truck order intake rose 61%. Demand on the construction-equipment side has been driven by high construction activity in most markets, it added. Volvo said the situation in the supply chain is strained in many areas and there will be production disturbances and increased costs. Presently, there is a global shortage of semiconductors across industries and as a result Volvo will be forced to adapt production at least during the first quarter.

GUIDANCE: For 2021, Volvo now sees the European heavy-duty truck market at 290,000, from 240,000 previously. The North American heavy-duty truck market is now seen at 290,000 from 250,000, while in Brazil, the market is now seen at 95,000 from 75,000. The Chinese heavy- and medium-duty truck market is now seen at 1.43 million from 1.45 million. Guidance for India was cut by 30,000 trucks.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

02-03-21 0853ET