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Volvo profit up, sales back to pre-crisis levels
By KARL RITTER
Associated Press
2011-07-22 04:16 PM
Truck maker Volvo AB's second-quarter profit surged 63 percent as sales returned to levels last seen before the financial crisis, the Swedish company said Friday.

Net income rose to 5.12 billion kronor ($802 million), up from 3.15 billion kronor in the same quarter last year.

Volvo's sales increased 15 percent to 79 billion kronor, from 68.8 billion kronor in the second quarter of 2010.

"Sales are now at the same level as before the financial crisis that struck the world a few years ago, with a profitability that is now at its highest level so far, both in terms of operating margin and return on shareholders' equity," CEO Leif Johansson said.

Volvo shares rose 4 percent to 106.40 kronor ($16.66) in Stockholm after the report.

The company, which sold its car division in 1999, is one of the world's biggest truck makers, with brands including Volvo, Mack, Renault and UD trucks. The company also makes buses, engines and construction equipment.

Sales in Volvo's truck unit alone rose 20 percent to 50 billion kronor, and the company said it now controls 20 percent of the heavy-duty truck market in the U.S. and 28 percent in Europe.

"In terms of market conditions, we maintain our previous forecasts that the truck market in both Europe and North America will amount to 230,000-240,000 heavy-duty trucks in 2011," Volvo said.

Truck sales were up 31 percent in Europe, boosted by demand in France, Germany and Poland.

In North America, Volvo more than doubled its deliveries to 10,290 trucks. Highway customers are leading the recovery there, while demand for vocational trucks such as garbage trucks is still "well below" normal levels, Volvo said.

Truck deliveries dipped by 9 percent in Asia, as a result of production disturbances for UD Trucks in Japan following the earthquake and tsunami. The disruptions cost Volvo 400 million kronor in operating income, mostly affecting its unit for construction equipment.

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