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News > International
Volvo 1Q rises 13%
April 26, 2000: 6:01 a.m. ET

Truck maker predicts growth in Europe, Asia, lower demand in North America
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LONDON (CNNfn) - Swedish truck maker Volvo posted a 13 percent jump in first-quarter operating profit Wednesday, and predicted strong demand for heavy trucks in Europe and Asia in the rest of the year, although orders from the North American market have turned down.
    Volvo agreed Tuesday to pay $1.4 billion to buy Renault's truck division, making the enlarged company the world's second-biggest truck maker.
    The Gothenburg, Sweden-based company said operating profit for the first three months of 2000 rose 13 percent to 1.43 billion Swedish crowns ($161 million), excluding last year's contribution from the passenger car division, which Volvo sold in 1999 to Ford (F: Research, Estimates). Earnings per share rose 32 percent to 2.9 crowns while revenue rose 13 percent to 30.5 billion crowns.
    Pretax profit after financial items was 1.89 billion crowns, below the 2.02 billion crowns expected by analysts polled by Reuters. graphic The company didn't publish a comparable figure for the same period a year earlier, when pretax profit was swelled by a 26.7 billion-crown profit from the sale of the car division.
    The Renault deal is expected to generate savings of 3.5 billion crowns a year after two years, and an additional 3 billion crowns a year further out.
    The star performer in the first quarter was the construction equipment division, which increased its contribution to operating income by 71 percent to 311 million crowns.
    The crucial truck division saw profit fall 22 percent to 645 million crowns because of weaker sales in North America and increased costs as it introduced new models.
    The firm described the European Commission's decision to block its takeover of Swedish rival Scania as "disappointing", and said it was considering what to do with its 45 percent stake in Scania.
    Volvo stock rose almost 4 percent in Stockholm Wednesday to 225 crowns. Back to top

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Volvo, Renault in $1.4 billion truck deal - Apr. 25 , 2000
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