Volvo AB, the world’s second-largest truckmaker, said fourth-quarter profit dropped 84 percent because of the cost of cutting jobs and reorganizing production in response to shrinking economies in Europe and the U.S.
Earnings before interest and taxes fell to 1.12 billion kronor ($177 million) from 6.96 billion kronor a year earlier, Gothenburg, Sweden-based Volvo said in a statement today. Profit missed the 2.47 billion-krona average of eight analyst estimates compiled by Bloomberg. Sales declined 2.2 percent to 303.6 billion kronor.
Volvo, which ranks second to Daimler AG in global truck sales, posted 990 million kronor in costs and eliminated 2,000 jobs for cutting back construction-equipment manufacturing in Sweden, ending busmaking there and closing a truck plant in Japan that served the U.S. market. The economy of the 17 nations sharing the euro went into recession in the third quarter, and U.S. gross domestic product shrank in the fourth.
“The first quarter of 2013 will also be difficult as a result of the low order intake in many markets during the fourth quarter of 2012,” Chief Executive Officer Olof Persson said in the statement. “Profitability will be affected by low capacity utilization, high spend levels in research and development and costs associated with the launch of new products.”
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via Volvo Earnings Plunge 84% as Europe Drop Prompts Job Cuts – Bloomberg.
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Reblogged this on This Got My Attention and commented:
Re-recession coming? Volvo, the second largest maker of trucks, expects to sell fewer of them.
Posted by Mike | February 6, 2013, 8:18 am