* More than doubles planned job cuts to 4,400
* Says majority of jobs cuts to come in 2014
* Q4 core profit 3.1 bln SEK vs forecast 3.8 bln
* North American growth underpins order rise
* Q4 truck orders up 12 pct yr/yr vs forecast -1 pct
(Adds detail, background, analyst comment, share price)
By Niklas Pollard and Johannes Hellstrom
STOCKHOLM, Feb 6 World No.2 truck maker Volvo
will increase its job cuts to 4,400, more than double
its original plan, after currency effects and the cost of
launching new models muted a rise in quarterly earnings.
But Sweden's biggest private sector employer also unveiled a
stronger-than-expected order intake in the fourth quarter on
growth in North America, sending shares more than 4 percent
higher by 0800 GMT to outperform the broader market in Stockholm
"The order intake for trucks was the main positive
surprise," Swedish bank Handelsbanken said in research note.
Volvo, vying with Germany's Daimler to be market
leader, posted fourth-quarter operating earnings excluding
restructuring charges of 3.08 billion crowns ($471.65 million)
from 2.19 billion a year earlier, below a forecast 3.80 billion
in a Reuters poll of analysts.
Sweden's top company by sales, whose profitability has
traditionally lagged rivals such as Scania and U.S.
group Paccar, is in the second year of a vast scheme to
boost profit margins, in part by cutting staff.
Volvo, which employs about 115,000 workers, said the
reduction of jobs and consultants unveiled on Thursday was an
expansion of a plan to cut 2,000 positions announced last year
and it would involve staff in its trucks business and in areas
such as sales and marketing.
"The personnel reductions will begin immediately and a
majority will be implemented during 2014," Chief Executive Olof
Persson said in a statement.
Over the past year, Volvo's earnings have been hit by the
cost of launching and bringing into production new truck models
in the group's biggest ever overhaul of its range.
"We have a further couple of quarters before we are through
the industrialisation of the new generation of trucks and the
phase-out of the old generations," Persson said.
TIME TO DELIVER
Gothenburg-based Volvo set a target in 2012 to raise its
operating margin by 3 percentage points by the end of 2015.
The efforts so far have had little impact on the bottom line
and pressure is building on Volvo, which also makes construction
equipment, buses and engines, to produce a higher rate of
profitability than the 2.9 percent margin in 2013.
By contrast, Scania last week posted a 10.1 percent margin.
Christer Gardell, managing partner of activist fund Cevian
and Volvo's second biggest owner by votes, told a newspaper last
month the company needed to stop making excuses and start
But looking ahead, several factors may benefit Volvo.
After its launch of new truck ranges last year, 2014 should
see the brand-new models underpin growth while costs for
research and development, a lower headcount and streamlining of
its network of workshops should bolster profitability.
Order bookings of its trucks in the fourth quarter held up
better than expected as demand in North America made up for a
slowdown in Europe after new emission rules came into force.
Volvo, which makes heavy-duty trucks under the Renault, Mack
and UD brands as well as its own name, said order intake of its
trucks rose 12 percent year-on-year in the fourth quarter,
topping the 1 percent decline seen by analysts.
The company also left unchanged its forecasts for truck
markets this year, implying a slight decline in Europe and
modest growth in North America and Brazil.
The view was roughly in line with that of Daimler, which
reported separately on Thursday, though it expected a slightly
slower development in Brazil and the potential for somewhat
stronger growth in North America.
($1 = 6.5302 Swedish crowns)
(Reporting by Niklas Pollard and Johannes Hellstrom; Editing by
Mark Potter and Elizabeth Piper)