Volvo reports wider loss, forecasts market recovery

Volvo AB, the world's second-largest truckmaker, reported a 2 billion-kronor ($268 million) quarterly loss, missing analysts' estimates, on job-cut costs and slumping demand for heavy trucks.

The fourth-quarter net loss, equivalent to 0.99 krona a share, widened from a loss of 1.36 billion kronor, or 0.67 krona, a year earlier, the Gothenburg, Sweden-based company said today in a statement. Volvo took 1.4 billion kronor in restructuring charges and inventory writedowns.

Volvo, which competes with market leader Daimler AG's truck unit as well as Scania AB, forecast a recovery in European and U.S. truck markets. Freight companies have put off purchases of vehicles as trade shrank across the region, and truck manufacturers, unlike carmakers, haven't received government incentives to spur sales.

The forecast "sends a positive signal," said Hampus Engellau, an analyst at Handelsbanken Capital Markets in Stockholm, who rates Volvo shares "accumulate."

Volvo rose as much as 1.9 kronor, or 2.9 percent, to 66.50 kronor and traded at 65.80 kronor as of 9:36 a.m. on the Stockholm exchange. Before today, the shares have risen 5.1 percent this year, compared with a 0.3 percent decline for the OMX Stockholm 30 index.

Analysts had estimated a loss of 356 million kronor, according to the average of 11 estimates compiled by Bloomberg.

Sales fell 23 percent to 59.8 billion kronor in the quarter from a year earlier. The operating loss reached 2.32 billion kronor, compared with a loss of 999 million kronor in the year- earlier period.

Market Recovery

The market for heavy trucks sold in Europe will probably grow 10 percent in 2010, compared with the 164,000 units sold in 2009, Volvo said. The North American market is likely to expand 20 percent to 30 percent from the 115,000 trucks sold last year, the company said.