Volvo’s 1Q in red; tough business year seen
Apr 23, 2002 12:00 PM
Truck maker Volvo posted a surprise loss and negative cash flow for the first quarter and said business would be weak this year, although the North American truck market may have bottomed out. The Sweden-based group's shares slumped to six-week lows in early trade. Volvo said its January-March loss after financial items halved to $59.99 million from a $125 million loss in the year-ago period. The result compared with a mean forecast of a $10.9 million profit in a Reuters poll of analysts. Sales slumped 7.7 percent to $464 million. "We are in the middle of a difficult business cycle and... the business environment will continue to be difficult across the group during 2002. There are few signs of immediate recovery," Volvo said. "The market consensus forecast for Volvo's earnings had been far too high," one analyst told Reuters. "I think the market had too high expectations on Global Trucks." On a cautiously positive note, however, Volvo said its order bookings were beginning to improve. Production of its new truck models, which had met strong demand, would start catching up with orders in the second quarter. "In North America, our truck operations were still under pressure," Volvo Chief Executive Leif Johansson said in the statement. "A slight increase of order intake could indicate that the market has bottomed out," he said, referring to North America.
