STOCKHOLM (Reuters) -Swedish truckmaker AB Volvo smashed forecasts for first-quarter core earnings on Thursday on the back of surging demand, lifting its shares, but cautioned a global chip shortage was set to hit 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, breezing past the 9.55 billion seen by analysts, according to Refinitiv data. “Very solid Volvo numbers. A beat on guidance, orders and earnings,” said Kepler Cheuvreux analyst Mats Liss, predicting the results would lift consensus forecasts and Volvo shares. The shares were up 5.4% at 0701 GMT, extending gains for this year to around 10%. “The first quarter of 2021 was characterized by high activity among our customers, which was reflected in good demand,” Chief Executive Martin Lundstedt said in a statement. A global shortage of semiconductors has started to weigh on the vehicle industry, 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, repeating guidance on the production stop days ahead. Market demand for trucks, meanwhile, has experienced a strong recovery and saw Volvo rival Traton raise its outlook for 2021 earlier this week. Volvo, which also competes with Germany’s Daimler, said order bookings of its trucks shot up 123% versus a pandemic-ravaged quarter a year ago, and stood by its outlook for robust truck markets in Europe and North America, while raising guidance for China.