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AB Volvo reports buoyant profit that beat expectations



  

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Friday, 22 July 2011
The heavy duty vehicle manufacturer, Volvo Group, reports a profit before tax of Skr7.249 million for the second quarter, compared with profit of Skr4.541 million the same period last year.
Analysts had on average expected a profit of Skr7.14 million, according to Reuter’s consensus.
Sales amounted to Skr78.962 million, compared to Skr68.765 million a year earlier. Sales are now up at the same levels as before the financial crisis and productivity is the highest ever, according to CEO Leif Johansson.

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Sales rose by 15 percent, but adjusted for currency fluctuations, sales rose by as much as 29 percent.

For the second largest business area, construction equipment, operating profit declined by 9 percent to Skr1.9 billion, while sales rose 15 percent to Skr17.5 billion.

“Going forward, I am convinced that the Group will continue its positive development. Our intensive efforts to develop and launch a large number of new products that will reach the market in the next few years continue,” said Leif Johansson, President and CEO in the report

According to AB Volvo management, the company has also gained market share in the heavy truck segment.
Operating margin, a kind of measure of profitability, rose from 6.0 to 10.2 percent. Earthquake in Japan affected the Volvo Group's earnings by approximately Skr400 million, Skr100 million for trucks and Skr300 million for the business area movers machines.
The changes in exchange rates over the same period last year lowered its operating profit by some Skr1.7 billion.
By Scancomark.se Team


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