Volvo profits below expectations

Swedish truck-maker Volvo has reported an rise in profits in the third quarter. Profits after financial items rose to 4.57 billion kronor, up from 3.14 billion in the same period last year.

Net sales rose to 68.37 billion kronor, up from 60.48 billion. The profits, though up on the year, were somewhat lower than analysts expected. Analysts to whom Reuters had spoken said they expected pre-tax profits of 4.84 billion on the back of 65.45 billion kronor in sales.

The Volvo Group reported increased deliveries of trucks, particularly on the Asian market. In Europe, Volvo’s most important market, the company delivered 26,391 trucks, up 13 percent compared to the third quarter of 2006. Deliveries in North America fell sharply, from 17,284 to 7,494.

The total number of trucks delivered was up 18 percent to 57,151.

CEO Leif Johansson wrote in the report that he was optimistic that markets would pick up in both Europe and North America.

“We are preparing ourselves for continued strong demand in Europe, with a truck market that is projected to increase by 5-10%. In North America, we expect that the demand for trucks will pick up gradually during 2008,” he said.

Volvo Buses made a loss in the third quarter, due partly to a reduction in deliveries following production disruption. Increased losses in Mexico also had an effect.

“Buses has been experiencing problems for some time and strong measures will be required to reverse that trend and return profitability to satisfactory levels,” wrote Johansson.