Volvo reports record quarterly profit

Volvo reports record quarterly profit

World’s second largest truck market Volvo has come out with their quarterly reports. The company posted record quarterly profits for the quarter and raised its North American market outlook. However, the company’s share fell in the market as it reported falling margins and order bookings. These figures were way below market expectations. Volvo’s pretax earnings rose to $675.7 million.

Volvo said in a statement to the market: “The second quarter was our strongest ever, with high deliveries and high capacity utilization across most parts of the group.” The company lost around 5.8 percent in the share market as the core unit of the company, the truck segment saw a 10% slide in second-quarter order bookings. Even the margins were weaker than market expectations.

A senior market analyst, Michael Raab said: “The major concern is the weak order intake in the Trucks division. The pace of the weakening of order intake has been stepped up, and it is just a question of time before this will show up in delivery figures. It could be hard to justify the current high valuation of Volvo with such a hard decline.”

The company however said that the demand in its core American market was as strong as ever and it lost out due the fact that the orders for the year 2005 are already booked with the company.