Volvo AB, the world’s second-largest truckmaker, reported its first profit in more than a year, beating analysts’ estimates.
First-quarter net income was 1.7 billion kronor (US$234 million), or 0.83 krona a share, compared with a loss of Kr4.2 billion, or Kr2.09, a year earlier, the Gothenburg, Sweden-based company said in a statement yesterday.
Analysts had projected a loss of Kr8 million, based on the average of eight estimates compiled by Bloomberg.
Trucks and construction equipment, the two largest divisions that accounted for 81 percent of Volvo’s revenue, both returned to profit. Volvo lowered costs by cutting thousands of jobs after the financial crisis.
Revenue rose 4.4 percent to Kr58.6 billion, exceeding analysts’ average estimate of Kr55.6 billion. Construction equipment sales advanced 36 percent to Kr11.1 billion.
Orders for trucks more than doubled in the quarter to 43,936 vehicles from 20,183 a year earlier, Volvo said.
The increase shows that sales volumes will rise, Niclas Hoglund, a Stockholm-based analyst at Swedbank Markets who recommends investors buy the shares, said in a phone interview.
Volvo maintained its forecast that the market for heavy trucks sold in Europe would grow 10 percent this year and as much as 30 percent in North America.
“With a gradually improved global economy, demand is once again increasing for the group’s products,” CEO Leif Johansson said in the statement. “The measures we have implemented to cut costs have generated good results throughout the group.”
In South Korea, the nation’s second-largest carmaker Kia Motors said yesterday its net profit more than quadrupled in the first quarter, thanks to strong sales at home and abroad.
Kia, an affiliate of Hyundai Motor Co, said it earned 398.5 billion won (US$358 million) in the first three months of the year, up from 97.3 billion won in the same period last year.
“Strong demand for new models such as the K7 sedan and the Sorento R sport utility vehicle and increased sales in the United States, China and Russia drove profit and sales higher,” a company spokeswoman said.
First-quarter operating profit also surged more than three-fold to 309.8 billion won as sales rose 39 percent to 4.86 trillion won.
In Japan, Honda Motor doubled its operating profit in the year to March thanks to demand in emerging markets and the cheap yen, the Nikkei Shimbun reported yesterday.
Honda’s year-on-year operating profit shot up roughly 90 percent to ¥360 billion (US$3.9 billion) for the previous financial year, Nikkei Shimbun reported, without citing sources.
The figure exceeds previous expectations for a profit of ¥320 billion, it said.
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