Volvo Posts $46 Million Loss

STOCKHOLM, Sweden AP reports that Swedish truck and bus maker Volvo on Friday posted a fourth-quarter loss despite higher sales.

Volvo, which sold its carmaking operations three years ago, said it lost 487 million kronor ($46 million) in the October-December period, compared with a net profit of 1.19 billion kronor in 2000.

The fourth-quarter results included a restructuring charge of about 1.14 billion kronor ($107 million).

Net sales were 48.6 billion kronor ($4.6 billion) for the three months ending Dec. 31, up from 33.2 billion kronor in the same period of 2000.

The results were better-than-expected and shares rose 5.6 percent to close at 170 kronor ($16.03) on the Stockholm Stock Exchange.

For the year, Volvo lost 1.46 billion kronor ($138 million) in 2001, versus a net profit of 4.7 billion kronor in 2000. Sales for the year rose 50 percent to 180.6 billion kronor ($17 billion).

Volvo said results have been ``unsatisfactory throughout the entire year'' and the fourth-quarter results reflect continued negative economic trends.

The group said growth in Eastern Europe, Asia and South America had been insufficient to offset a steep drop in North America, where the total market for its key truck division declined by 34 percent.

Volvo also said demand for trucks was lower in Europe although the total market will remain ``at a relatively favorable level.''

The company was optimistic that restructuring and product renewal efforts would be effective in the long-term, including the completion of the acquisition of Renault V.I. and Mack Trucks.

It also reduced its work force by some 5,700 employees and 1,400 temporary employees and consultants during the year.

``The structural changes were implemented under difficult economic conditions, resulting in many painful, yet necessary decisions,'' chief executive Leif Johansson said in a statement.

The group's aero division also experienced a downturn in the aftermath of terror attacks in the United States but saw demand increase for aerospace components, Johansson said.

Volvo, which is based in the southwestern city of Goteborg, had 70,921 employees at the end of the year. It sold its car division to U.S.-based Ford Motor Co. [NYSE:F - news] in 1999.