Volvo sales decrease 6.2%
Swedish truck maker Volvo reported third-quarter profit that missed analysts' estimates as vehicle sales dropped in South America and Asia.
Net income fell to 1.37 billion kronor from 3.83 billion kronor a year earlier, Gothenburg-based Volvo said today in a statement. Sales decreased 6.2 per cent to 67.1 billion kronor (€7.77 billion).
"We have a tough quarter ahead of us to manage the consequences of the slow demand in the third quarter," chief executive officer Olof Persson said in the statement.
"However, with the production adjustments we are currently implementing, we believe we will have the right level of capacity going into 2013."
Volvo, which completed the sale of its aircraft-engine business in early October, is overhauling the truck division to boost operating profit as a proportion of sales by 3 percentage points by 2015.
Mr Persson, who became chief executive officer in September 2011, wants Volvo to rank at the top of the heavy-equipment industry in terms of operating margins, shifting focus away from pure sales growth as it competes with Germany-based Daimler, the biggest truck maker.
Volvo, which makes Mack-brand trucks in the US, reiterated a forecast from July that European industrywide sales in 2012 will drop to 230,000 trucks, while the North American market will increase to 250,000 vehicles.
That would amount to a 5.1 per cent decline for Europe, based on the 242,400 vehicles Volvo estimates were sold industrywide in the region in 2011, and a 16 per cent increase in North America from last year's 216,000 deliveries.
The company's shares fell 2.5 per cent to 90.2 kronor yesterday at the close in Stockholm.
The stock has gained 20 per cent this year, valuing Volvo at 192.1 billion kronor.
The manufacturer's truck orders declined 25 per cent from a year earlier to 45,272 vehicles, Volvo said.
Deliveries fell 7.88 per cent to 50,511 trucks, with the biggest contractions in South America and Asia.