Volvo profits rise despite fall in lorry demand

Swedish lorry-maker Volvo said Friday its net profit jumped by 19 percent in the third quarter despite a drop in sales as demand fell in the United States.

CEO Martin Lundstedt said in a statement that Volvo, number two in the industry, would "continue to have a strong focus on cost control" that helped make a profit of 2.6 billion kronor (270 million euros, $294 million).

Sales fell by 6 percent to 68.8 billion kronor in the three months from July to September, it said.

"The downward correction in the North American market continued and there is still a need to take down dealer inventories," Lundstedt said, adding that volumes of Volvo's truck business were down in all markets except Europe "where activity remained high".

Deliveries of heavy trucks were down by 13 percent, with a strong contrast between regions, up by 11 percent in Europe, but down by 46 percent in North America, 21 percent in South America, and 3 percent in Asia.

"Production volumes have gradually been adjusted downwards to meet the lower demand and further steps will be taken," Lundstedt said.

The improvement in operating margin, which is Lundstedt's priority since he left rivalling Scania in 2015, remains slow at 7.0 percent for the quarter and first nine months of the year, against 6.9 percent and 6.7 percent during the same periods in 2015.