Volvo Posts 4th Quarter Decline
STOCKHOLM, Sweden (AP) _ Swedish truck and bus maker Volvo posted a 28 percent profit decline in the fourth quarter, citing weak North American results.
The results beat market expectations, however, and Volvo’s shares rose 6.7 percent in trading on the Stockholm stock exchange.
Volvo’s net income fell to 1.2 billion kronor ($126 million) in the three months ending Dec. 31 from 1.6 billion kronor the previous year.
Net sales edged up to 35.9 billion kronor ($3.8 billion) in the October-December period from 35.2 billion kronor in 1999.
``In North America the entire truck industry is facing problems in the form of large inventories of used trucks and price pressures,″ the company said in a statement.
For the year, Volvo earned 4.7 billion kronor ($500 million), down from 32.2 billion kronor in 1999 which included some 27 billion kronor of capital gains from the sale of Volvo’s car division to U.S.-based Ford Motor Co.
Net sales for the year rose 4 percent to 130.1 billion kronor ($13.8 billion) partly because positive developments in Europe, Asia and South America compensated for continuously weak business conditions in North America.
Net sales in the truck division fell 1 percent to 62.2 billion kronor ($6.6 billion), but they were up in other areas. Its deliveries in North America declined by 31 percent to 23,610 last year.
Volvo, based in the southwestern city of Goteborg, also said it was strengthened by its $1.1 billion acquisition of Renault’s VI truck division and its U.S. subsidiary Mack Trucks Inc., which took effect Jan. 2.
``With the acquired units we are approaching the sales volume that the Volvo Group had before the sale of Volvo Cars,″ the company said.
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