STOCKHOLM, Sweden — Heavy vehicles maker Volvo AB posted first-half profits below market forecasts on Tuesday and said it did not expect its key markets in Europe and North America to revive and lift group sales in coming quarters.
Volvo's profit after financial items fell to $52.38 million in the first six months of the year from $403 million in January-June last year.
The mean forecast in a Reuters poll of analysts had been for a profit of about $60 million.
In the short term I have no view on the share price but in the longer term there's potential for it to move up," a fund manager who holds Volvo shares told Reuters.
There's a lot of bad news reflected in the (share) price but management are taking steps both in Europe and the U.S.," she said, speaking on condition of anonymity.
Sweden-based Volvo said economic conditions in North America and Western Europe, which account for the major share of the group's sales, indicated that . . . "little help can be expected from the market over the next few quarters."
Demand is declining in Western Europe, and we expect a further weakening," Volvo, the world's second biggest trucks maker, said in a statement.
Its outlook echoed that of industry monitor J.D.Power-LMC, which said in a report last week that West European trucks sales would go on falling this year and next before a recovery sets in.
Volvo Global Trucks President Tryggve Sthen told a news conference he expected deliveries in Europe to fall by 10 percent this year.
In Europe we are expecting a decrease of around 10 percent this year and the decline will continue into 2002," he said.
It ought to recover the year after that," Sthen added.