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Volvo Returns To Profit In Q3

Swedish truck maker returned to profit in third quarter, helped by strong demand in Brazil, India, China and Russia and a rebound in its mature markets.

STOCKHOLM (AP) -- Swedish truck maker AB Volvo said Friday it returned to a profit in the third quarter, helped by strong demand in Brazil, India, China and Russia as well as a rebound in its mature markets.

The Goteborg-headquartered group reported a net profit of 2.8 billion kronor ($421 million) in the quarter, in contrast with last year's loss of 2.9 billion kronor. Revenues soared 32 percent to 64 billion kronor from 48.5 billion kronor.

Still, the share fell 0.7 percent to 95.10 kronor ($14.31) in midday trading on the Stockholm stock exchange. Some market watchers blamed the fact that some of the profits were not related to the group's core business, but rather to other operating income such as trading gains.

Volvo said almost half of its total sales came from outside its traditional markets, including Brazil, India, China and Russia, but that both North America and the European truck market were performing well, too.

Volvo CEO Leif Johansson said the launch of a new type of trucks in North America -- equipped with engines that meet new tough emission regulations -- have been well received by the market there.

"We are continuing to hear many positive comments about the trucks from our customers," he said.

In Europe, Johansson said the market is recovering at a good pace, particularly in the central and northern parts of the continent. "The recovery there has been somewhat swifter and stronger than we expected, and we have progressively increased the rate of production in our plants to meet the rise in order intake," he said.

The Truck unit, which is Volvo's largest, reported a 36 percent increase in sales for the quarter, and a total order intake worth nearly 51 billion kronor compared with around 32 billion kronor a year ago.

The group also maintained its 2010 forecast for heavy duty trucks, predicting a 20-30 percent total growth in the North American market, and 10 percent in the European market.

Sydbank analyst Morten Imsgard said that the report looked "pretty strong" overall, especially the truck order intake.

He said the development in South America and Asia looks very promising for the future, coupled also with the improvements in Europe and North America.

"This is a sign that revenues can grow in the coming quarters," he said.

Volvo, which has around 90,000 full-time staff, also makes buses, engines and construction equipment. It sold its car division to U.S.-based Ford Motor Co. in 1999, which in turn sold it to China's Geely Holding Group earlier this year.
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