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Volvo beats analysts' predictions

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14:36 CEST+02:00
Swedish truck, bus, construction equipment and marine engine manufacturer Volvo AB on Tuesday announced a rise in first quarter net profits, beating analysts' expectations.

Volvo posted a 23 percent rise in net profit to 3.99 billion kronor in the quarter, compared to 3.24 billion kronor for the same period last year.

The company reported strong demand in Europe, record orders in the United States and projects in Asia, all of which pleased the markets. In midday trading on the Stockholm stock exchange, the company's share price rose 6.34 percent to 377.50 Swedish kronor.

Volvo registered pre-tax profits of 5.47 billion kronor, a rise of 18.87 percent, against 4.60 billion kronor for the same period last year. Analysts had expected this figure to drop below 4.5 billion.

Operating profit grew to 5.43 billion kronor from 4.53 billion in the same quarter in 2005.

The company reported 60.17 billion in net sales against 52.25 billion in the first three months of last year, a rise of 15 percent.

Deliveries of heavy vehicles to the European market increased by 10 percent to 21,410 units, while orders rose eight percent to 28,123.

"In Europe, interest in our new models generated increased order bookings, supported by a strengthening of the European economy and (the fact) that customers are ordering trucks prior to new emission standards that will be introduced on October 1, 2006," Volvo CEO Leif Johansson said in a statement.

Order bookings in North America were "extremely high" during the first quarter, he added.

Johansson also stressed the growing importance of Asian markets for the company, saying that the region was a high priority for Volvo.

AFP

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