Volvo Group Earnings, Revenue Fall in Second-Quarter and Six-Month Periods
Volvo Group reported earnings and net sales fell in the second-quarter and six-month periods, citing the slowdown in the North American truck market as a key factor that led to a plunge in orders.
Volvo’s North American heavy-duty truck brands include Volvo Trucks and Mack Trucks, both based in Greensboro, North Carolina.
Quarterly income for the period ended June 30 fell to $220 million, or 11 cents per diluted share, compared with $590 million, or 29 cents, in the year-earlier period.
New sales in the quarter slid to $9.1 billion from $9.7 billion, year-over-year.
“Despite a positive development in Europe, total deliveries of trucks decreased by 5%, mainly due to a weakening in North America and continued low demand in South America and other emerging markets,” Volvo Group CEO Martin Lundstedt said in a statement.
Total truck deliveries in all markets during the quarter reached 52,670, down from 55,613 a year earlier.
North American net truck orders fell 29% in the second quarter to 7,467 compared with 10,528 a year earlier; however, within that total, orders for Mack trucks rose 15% above the year-earlier period to 3,007.
Year-to-date, North American truck orders sank 45% to 16,359 from 29,819, including a 32% decline in Mack’s orders to 7,685 vehicles.
For the six-month period, income sank to $660 million, or 33 cents, from $1 billion, or 54 cents in the 2015 period.
Gothenburg, Sweden-based Volvo Group also said it reached a settlement with the European Commission, putting an end to a long-running EU antitrust investigation. As part of the settlement, Volvo said it will pay a fine of $730 million, with the amount mainly covered by provisions made in 2014 and 2016.
“The anti-trust investigation concerns the time between 1997 and January 2011," the manufacturer said in a statement, "and involves the Volvo Group as one of six manufacturers [including Daimler AG and Paccar Inc.’s DAF Trucks subsidiary — both have North American brands, as well]. The focal point of the case is the coordination on gross list prices but also the introduction of new emission related technologies [in EU markets].”
