Volvo’s 3Q Earnings Decline
Volvo AB’s third-quarter earnings declined as slower truck sales outside of North America offset gains in that region, the company said Wednesday.
Net earnings fell 64% to $206 million, Bloomberg reported, citing Volvo, which reports its earnings in Swedish kronor. Sales fell 6.2% to $10 billion.
“Sales for the Volvo Group were impacted by the weakening in demand that has become increasingly evident around the globe,” CEO Olof Persson said.
“To respond to declining demand and increasing inventories, we decided to adjust our production rates down in several parts of the company,” he said in a statement.
Volvo, which makes Volvo and Mack brand trucks in the United States, said its third-quarter North American net truck sales rose 14% year-over-year to 10,132 units, while year-to-date net sales rose 33% to almost 34,000 units over the same period last year.
Third-quarter net truck sales fell 11% in Europe to just over 16,000 units and declined 22% in South America to about 5,500 units.
Volvo held its North American industrywide truck sales forecast at 250,000 trucks and projected the same level for 2013, though it forecasts a slow start to the year.
“Continued economic concerns, sluggish job growth, the upcoming presidential election and the federal budget discussions have impacted orders as customers delayed purchasing decisions,” the company said of the U.S. market.
Volvo also took an approximately $90 million restructuring charge, which it had announced last month, for a cost-reduction program in Japan and to end production in Japan of UD Trucks for the U.S. market.
