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STOCKHOLM  - Swedish truckmaker AB Volvo reported first-quarter core earnings above market expectations on Thursday on the back of surging market demand but cautioned a global chip shortage would impact production in the near term.

Adjusted operating profit at the maker of trucks, construction equipment, buses and engines rose to 11.82 billion Swedish crowns ($1.41 billion) from 7.14 billion a year ago, beating the 9.55 billion seen by analysts according to Refinitiv data.

"The first quarter of 2021 was characterized by high activity among our customers, which was reflected in good demand for both new products and services," Volvo Chief Executive Martin Lundstedt said in a statement.

A global shortage of semiconductors has been hitting the vehicle industry hard, disrupting supply chains already stretched by a sharp rebound in demand following the deep slump endured during the initial months of the pandemic.

Squeezing automakers such as General Motors and Volkswagen, the lack of supply has also hit truckmakers with Volvo warning last month it would idle some of its factories for weeks during the second quarter.

While shortage of semiconductors had a limited impact on Volvo's production in the first quarter, the chip supply chain "remains very unstable and the uncertainty about the development is high," Lundstedt said.