Volvo profit slumps on North American market weakness

Volvo reported a drop in second-quarter profit, citing lower vehicle volumes and uncertainty among customers in the North American market.

The Swedish truck maker said Thursday that net sales fell 12% to 122.9 billion Swedish kronor from 140.2 billion kronor a year earlier.

Adjusted operating income declined to 13.5 billion kronor from 19.4 billion kronor, with the adjusted operating margin narrowing to 11.0% from 13.9%, the company said.

“In a quarter characterized by a general stabilization of the European market and more of uncertainty and a wait and see mode among customers in North America, the Volvo Group's net sales declined by 5% adjusted for currency movements and amounted to SEK 122.9 billion (140.2),” said Chief Executive Martin Lundstedt.

Vehicle sales were down 6% when adjusted for currency, though the company noted that its underlying service business remained robust.

Currency movements had a negative impact of 2.31 billion kronor on operating income compared with the same period last year, according to the company.

Earnings per share for the quarter fell to 3.64 kronor from 7.65 kronor.

The results come after Volvo announced last month it was selling its majority stake in its Chinese joint venture, SDLG, to refocus its strategy in the country.