Renault earnings down on lower asset sales

AP News
Posted: Feb 16, 2012 3:25 AM
Renault earnings down on lower asset sales

Renault SA saw its earnings fall in 2011 compared to a year earlier when the French car maker booked an exceptional euro2 billion ($2.62 billion) gain on the sale of part of its stake in Sweden's Volvo AB.

France's number two car maker after Peugeot-Citroen reported Thursday a net profit of euro2.1 billion, down from euro3.4 billion a year earlier, when earnings were boosted by the sale of Volvo shares Renault acquired when it sold its truck making division to the Swedish car maker in 2001.

The maker of Megane sedans and Twingo compact cars said it expects its core French car market to shrink by up to 8 percent this year, while the European car market where Renault makes well over half its sales will decline by 3 to 4 percent.

Last year Renault sold nearly 100,000 additional vehicles, taking its global total to over 2.72 million. Gains were driven outside Europe, notably in growing markets in Russia, Turkey and Latin America.

Renault shares gained in early trading on the Paris stock exchange as investors welcomed the report, which was in line with analysts' forecasts. Renault shares were up 2.5 percent at euro37.09.

The car maker also did considerably better last year than cross-town rival Peugeot Citroen, which Wednesday said expensive restructuring costs had nearly halved its 2011 profit. It also took a more pessimistic view on the outlook for France's car market this year, forecasting a 10 percent contraction.