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April 23, 2015 8:00 AM, EDT

Volvo's First Quarter Sales Increase, But Foreign Exchange Creates a Drag

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Sweden-based manufacturer Volvo AB reported first-quarter increases in sales and net income, including at its truck-making operations — the second-largest in the world.

While the North American truck market was one of the company’s strongest areas, Volvo also said April 22 that currency fluctuations, especially against the strong U.S. dollar, diminished results.

The corporation earned 4.24 billion kronor ($508.7 million), or 2.09 kronor per share during the three months ended March 31. At the start of 2014, Volvo had net income of 1.14 billion kronor ($176.6 million), or 0.53 kronor per share.

Quarterly sales improved to 74.79 billion kronor from 65.65 billion, although the dollar equivalents declined to $8.98 billion due to the deteriorating exchange rate for the Swedish currency.

Before adjustments, global truck division sales rose 18% to 51.66 billion kronor ($6.2 billion), but the company said it was only a 3% increase when foreign exchange came into play.

On a dollar basis, truck division profits rose to $750 million for the quarter from $278.3 million during the same time in 2014. Much of that improvement was a capital gain worth $296.7 million generated by the sale of 1.27 million shares of Indian manufacturer Eicher Motors Ltd.

The truck division’s quarterly profit margin, excluding the Eicher sale, improved to 7.3% from 4.1% during the start of 2014.

Volvo maintained its forecast that industrywide registrations of new North American heavy-duty trucks will rise to 310,000 this year from 270,300 in 2014.

Volvo’s three other manufacturing divisions are construction equipment, buses, and marine and specialty engines.