Volvo Profit Rises as East Europe Offsets U.S. Slump

[steinravnik]

Volvo Profit Rises as East Europe Offsets U.S. Slump

April 25 (Bloomberg) -- Volvo AB, the world's second-largest truckmaker, said first-quarter profit rose 12 percent as booming eastern European sales overcame the effects of a slump in the U.S. market.

Net income increased to 4.2 billion kronor ($707 million), or 2.07 kronor a share, from 3.75 billion kronor, or 1.85 kronor, a year earlier, Gothenburg, Sweden-based Volvo said today in a statement. Seven analysts surveyed by Bloomberg News had predicted profit of 3.88 billion kronor. Sales gained 26 percent to 76.7 billion kronor.

Chief Executive Officer Leif Johansson today forecast Europe's truck market will grow by 10 percent this year, an increase from a previous prediction of between 5 percent and 10 percent. North American demand remains low and inventories remain high at dealers, Johansson said.

``Our truck operations continue to secure orders at a pace that is surprisingly high, taking into account the long delivery times and uncertainty about how the weak business climate in North America, and concerns on the financial markets, will impact the real economy,'' Johansson said.

First-quarter truck-division orders, excluding the Nissan Diesel Motor Co. unit acquired last year, fell 26 percent to 44,654 vehicles. Revenue at the truck division, the company's largest, rose 12 percent to 50.8 billion kronor in the first three months.

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