Volvo Cars reported a decrease in second-quarter operating profit, beating analyst expectations. The company faces challenges from tariffs and softening demand. Shares rose nearly 8% in response. Despite difficult conditions, the results were better than feared, with an adjusted operating profit of 2.9 billion Swedish crowns.

The company, owned by China’s Geely Holding, saw a drop in gross margin to 13.5%, attributed to tariffs. Volvo Cars announced a $1.2 billion impairment charge, resulting in an operating loss of 10 billion crowns. Former CEO Hakan Samuelsson returned to help boost the company’s struggling share price with cost-cutting measures and job cuts.

Volvo is the first European carmaker to report in a tough earnings season. Demand for electric vehicles is low, competition from Chinese manufacturers is strong, and trade tensions persist. Despite challenges, analysts believe the company’s results will lead to a positive market reaction.

Read more at Yahoo Finance: Volvo Cars quarterly operating profit beats expectations despite tariff hit