(Updates with analyst comment in third, fifth paragraphs.)
Oct. 21 (Bloomberg) -- Scania AB, the Swedish truckmaker controlled by Volkswagen AG, reported third-quarter profit that beat analysts’ estimates as demand for heavy trucks held up.
Net income rose 2 percent to 2.34 billion kronor ($350 million) from 2.31 billion kronor a year earlier, the Soedertaelje, Sweden-based company said in a statement today. Twelve analysts surveyed by Bloomberg estimated a 2.07 billion- krona profit. Sales rose 14 percent to 21.1 billion kronor.
“This quarter shows still a pretty good order uptake for the company,” said Morten Imsgard, an analyst at Sydbank A/S in Aabenraa, Denmark, with an “underweight” rating on Scania’s shares. “Going into 2012 they probably don’t expect much growth in the market but still a level of sales that will be kept up by demand for replacing aging trucks.”
Third-quarter orders gained 22 percent to 18,894 trucks and buses, the manufacturer said. Scania plans to lower production at European factories by as much as 15 percent beginning next month as demand for commercial vehicles drops, it said Oct. 10. It will do so mainly by not extending the contracts of some 900 temporary workers in Europe, it said today.
“It highlights the flexibility of the Scania production system, and I think they’re right to move in that direction to avoid building up large stockpiles of trucks,” Imsgard said. “They’re trying to be ahead of the curve.”
Scania rose as much as 3.4 percent to 106 kronor and was up 2.4 percent at 105 kronor as of 11:10 a.m. in Stockholm. The stock has dropped 32 percent this year, valuing the manufacturer 82.8 billion kronor.
“Deliveries have generally held up,” Chief Executive Officer Leif Oestling said in the release. “However, demand for vehicles decelerated towards the end of the period, primarily in southern Europe.”
Scania is considering a merger with MAN SE in Germany to create Europe’s largest manufacturer of commercial vehicles.
Scania was first among European truckmakers to publish third-quarter figures. Swedish rival Volvo AB will report Oct. 25. Daimler AG, the world’s largest truckmaker, is scheduled to publish figures Oct. 27, while MAN SE is Nov. 2.
--Editors: Chad Thomas, Robert Valpuesta.
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