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Truck maker Volvo posts 19% profit growth

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STOCKHOLM (AP) _ AB Volvo, maker of Mack Trucks in the United States, said Friday its earnings grew 19 per cent in the second-quarter on strong sales in Europe and North America.

The profit beat expectations but Volvo shares fell 1.1 per cent in Stockholm to close at 365 kronor ($49.91) amid worries that U.S. sales would slump next year.

Volvo, which sold its car division to U.S.-based Ford Motor Co. (NYSE:F) in 1999, said net profit in the April-June period was 4.68 billion kronor ($640 million US), up from 3.93 billion kronor in the same months last year.

Net sales grew seven per cent to 65.5 billion kronor ($8.96) from 61.1 billion kronor in the second quarter of 2005.

Volvo upgraded its full-year 2006 market forecast for trucks by 10,000 vehicles in both Europe and North America.

``The new forecasts are for a market of 280,000-290,000 trucks in Europe and 330,000-340,000 trucks in North America,'' chief executive Leif Johansson said.

Demand for older trucks has surged ahead of new emission standards, taking effect on Oct. 1 in Europe and January 2007 in the United States.

But Volvo has said it expects a temporary fall in order bookings in North America until customers there start ordering trucks with engines meeting the stricter emission standards. Orders dropped 68 per cent in North America in the quarter.

The Goteborg, Sweden-based company _ the world's second-largest truck maker behind DailmlerChrysler AG _ said truck sales were up six per cent in the quarter. Volvo's truck brands include Mack Trucks in the U.S. and Renault Trucks in Europe.

Johansson said Volvo was starting to widen its focus in Europe, which has mostly been on heavy long-haul trucks, to include more medium-sized vehicles.

Sales also increased in Volvo's other business areas, including buses, construction equipment and engines.

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Truck maker Volvo posts 19% profit growth
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