Volvo AB (NASDAQ: VOVL) shares dropped 7 percent on Wednesday after the truck maker said second-quarter net profit fell 14 percent as the North American truck market continued to drag on the firmâ€™s otherwise strong demand in Europe and Asia.
The world's second-largest truck maker behind DaimlerChrysler AG said net profit decreased to 4 billion crowns ($600.8 million) compared with 4.67 billion crowns in the year-ago quarter. Revenue grew 5.1 percent to 71.45 billion crowns.
The Sweden-based firm, which sells heavy-duty trucks under the Renault and Mack brands as well as its own name, said it saw the North American truck market shrinking to between 200,000 to 220,000 units this year.
Volvo also had difficulties in North America as a result of the transition to new trucks with a new generation of engines,said Leif Johansson, Volvo CEO. There were also disturbances in conjunction with changes in the North American production structure.
Johansson today maintained his forecast for European heavy- truck sales, saying the market would probably grow to 330,000 vehicles in 2007, from 294,997 last year.
American depositary shares of Volvo fell $1.50 or 7.11 percent to $19.61 in morning trading on the Nasdaq Stock Market.