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Swedish Volvo Group’s stock share gained on the Stockholm stock exchange although the truck maker made a larger loss than expected.
• Volvo’s loss deeper than expected
The Gothenburg-based truck maker posted a third consecutive quarterly loss on Tuesday, far worse than analysts’ forecast.
Still, the stock share rose as much as 3.8 percent on the Stockholm stock exchange and was up 1.4 percent at lunchtime. Since the turn of the year the stock has gained 26 percent on recovery hopes.
Evli Bank analyst Michael Andersson told Dow Jones Newswires that there were some positives in Volvo Group's second-quarter performance, pointing to an increased cash flow in the company's industrial operations, which includes its truck and bus divisions.
"The worst bleeding has been stopped, that's clear. I wouldn't be surprised if the market reacts positively," Andersson was quoted as saying.
Net sales for the period fell 33 percent to 53.96 billion kronor while order bookings tumbled 51 percent in the quarter compared to last year. But in contract to its rivals in the sector, Volvo seems to be succeeding in cutting inventories and adjust to lower demand - something that drastically is slowing the drain of cash.
"I think that market expectations were for a much more negative cash flow," Handelsbanken analyst Hampus Engellau said to Reuters.
Volvo Group posted an operating loss of 6.9 billion kronor (€627 million, $885 million) for the three months ended June 3o, down from a profit of 7.2 billion kronor a year earlier. A survey by Reuters had forcast a loss of 4.7 billion kronor.
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Last Updated (Tuesday, 21 July 2009 12:17)