Volvo Truck’s Quarterly Earnings Slip

AB Volvo reports that group net sales in the fourth quarter of 2013 grew 8% to 77 billion kronor (€8.6 billion), as deliveries of its commercial trucks rose 15% to 61,600 units.

But new-product launch costs and restructuring charges cut the group's operating income in October-December by 34% to 996 million kronor (€133 million). Net income fell 37% to 548 million kronor (€61 million).

CEO Olof Persson describes the group's profitability level "unsatisfactory." He says the company will increase efforts to reduce product costs and is reviewing its lineup for possible cuts.

For the full year, Volvo Truck's net revenue slid 9% to 273 billion kronor (€30.7 billion), and deliveries of 178,500 units trailed the total in 2012 by 6%.

Operating income in 2013 plunged to 5.6 billion kronor (€632 million) from 16.6 billion in 2012, and net income dropped two-thirds to 3.8 billion kronor (€429 million).

Volvo Group predicts a "stable" market for commercial trucks in 2014. The company expects a slow start and gradual improvement in European truck sales this year. It predicts continuing weak demand for buses, especially in Europe.