Swedish bus and truckmaker Volvo on Wednesday said its second-quarter net profit dropped 14%, mainly hurt by higher costs and continued tough market conditions in North America.
For the three months ended June 30, the Goteborg-based company said it earned 4 billion kronor ($603 million) down from 4.67 billion kronor in the same quarter in 2006.
Sales in the quarter, however, rose to 71.45 billion kronor, compared with 68 billion kronor in the year-ago period. The rise was helped mainly by recently acquired companies, it said
Pretax profit fell to 5.97 billion kronor in the second quarter, down from 6.46 billion kronor in the same three months last year, falling short of analyst expectations of 6.21 billion kronor.
Volvo Chief Executive Leif Johansson said in a statement that for the company's trucks unit the trend is very strong in Europe but "significantly weaker" in North America.
The difficult quarter in North America was expected, he said, as a result of the ongoing transition to new trucks with new generation engines.