Net sales for the company dropped 7 percent to 12.278 billion SEK ($1.9 billion). Volvo CE says sales were mainly affected by “lower activities in the global mining industry which particularly hit sales of larger and more expensive products.”
Volvo CE says this slowdown in global demand also impacted operating income which fell 17 percent to 496 million SEK ($78.2 million). The company notes its positive operating margin of 4 percent. That mark is only slightly below the 4.5 percent operating margin from the same quarter one year ago, despite 1 billion SEK fewer in sales.
“While there is still no clear sign of a global market recovery in the construction equipment sector, we did see an uptick in China, driven by sales of smaller equipment, and a slight increase in the European market,” said Volvo CE president Pat Olney in a prepared statement. “Our base scenario for 2014 is that the markets will remain at largely the same level as we have seen in 2013.”
The company’s outlook for the full year remains unchanged. Volvo CE expects sales in Europe to be down by anywhere between 5 and 15 percent by the end of the year, while North America, South America, China and the rest of Asia are all expected to finish anywhere from a decline of 5 percent to a gain of 5 percent.
Looking forward to 2014 the company expects each market except China to be in the range of minus 5 percent to plus 10 percent. China is forecast to range from flat to plus 10 percent.