October 18, AB Volvo reported higher third-quarter income and sales on Friday. However, it warned that orders for new trucks in North America and Europe proceed to decline, and a strike at Mack Trucks unit might pinch profits depending on how long it lasts.
Volvo gained $1.12 billion compared with $1.05 billion within the July-to-September period a year ago. The consensus of analysts known for earnings of $1.03 billion, based on financial market data.
Net sales in truck operations rose by 6% to $6.65 billion. Operating income was $770 million, associated with $700 million within the third quarter of 2018. A year ago, the operating margin of 11.6% compared positively to 11.1% in the same quarter.
Volvo shares have decreased 7% in value over the last six months because the truck market has cooled.
The second rank global truck maker behind Daimler AG is the parent company of Volvo Trucks North America and Mack Trucks.
In North America, orders have been off 81% to just 4,966 trucks compared to a record-setting quarter a year earlier. North American deliveries have been down 6%. Volvo’s market shares in North America fell from 1.2 % to 9.3% from 10.5% a year earlier.
A United Auto Workers strike by more than 3,500 employees in three states was in its sixth day Friday. Its influence is spreading.
Volvo Trucks North America will idle its assembly plant in Dublin, Virginia, on October 21 and temporarily lay off about 3,000 employees due to a lack of engines and transmissions from a strikebound powertrain facility it shares with Mack in Hagerstown, Maryland.
Both Volvo North America and Mack planned two weeks of downtime before the end of the year to shrink bloated inventories. Neither would say how production lost through the strike would affect those plans.
AB Volvo stated within the business risks notes in its earnings report that the strike may impact profits relying on how long it lasts. Negotiations between Mack and UAW bargainers are scheduled to continue on Tuesday, October 22.