Volvo’s Second-Quarter Profit Rises
Volvo AB’s second-quarter operating profit rose, aided by a company program designed to lower operating costs.
Earnings before interest and taxes rose 9.2% to $521 million, Gothenburg, Sweden-based Volvo reported.
Second-quarter truck orders dropped 6% to 52,974 vehicles as deliveries rose 2.4% to 53,223, Volvo said. Orders for construction equipment declined 22%, and deliveries fell 18%. Net income climbed 23% to 2.47 billion kronor.
“With the closing of the second quarter, we are halfway in the strategy program that will continue until the end of 2015 and which shall increase the Volvo Group’s profitability. The program is progressing according to plan, and we are beginning to see positive effects from all the decisions we made in 2012 and 2013,” CEO Olof Persson said in a statement.
“We are slightly ahead of plan with respect to our objective of increasing the gross margin on our trucks through improved price realization, while we will strengthen our focus on lowering our operating costs,” he added.
“Results could have been better,” Hans-Peter Wodniok, a Kronberg, Germany-based analyst with Fairesearch told Bloomberg News. “The construction-equipment business is disappointing and weighs on profits. Order intake hasn’t been getting out of the starting gate as worldwide infrastructure spending seems restrained.”
Volvo Group is the parent company of Volvo Trucks and Mack Trucks, both of which produce heavy-duty trucks in the United States.
