German industrial group MAN said on Wednesday that restructuring at its commercial vehicles unit was ahead of schedule, keeping it on track for higher profits, but investors worried it was not yet out of trouble, Reuters reported.

The group posted an expected rise in quarterly profit, the report said.

Reuters said group pre-tax profit jumped 26% in the period to €48 million ($US55 million), in line with expectations while the commercial vehicles division posted a €15 million pre-tax profit after last year's break-even result, but growth came from cost cuts rather than improving sales.

"In view of the successful turnaround presently underway in the commercial vehicles division... we are still assuming that in 2003 the group as a whole will achieve higher pre-tax earnings than in 2002," the company said in a statement cited by Reuters.

It also reiterated it expected a sharp upturn in earnings in 2004 as an anticipated economic rebound bolsters its restructuring and cost-cutting measures, the report said.

According to Reuters, the group said it now expected its ailing bus unit to return to profit in 2004, a year ahead of schedule, adding that the revamp at the trucks and buses division was a major contributor to the rise in third-quarter earnings.

New orders also improved at MAN's trucks unit in the third quarter, a trend which it said was likely to continue next year, the report said.

Some analysts told Reuters the division was still producing disappointing results, however.

According to Reuters, MAN chief executive Rudolf Rupprecht repeated truck making was a core business and it would hurt the company to spin it off, although he remained open to joint ventures.

The trucks business has been the subject of continued takeover speculation, the news agency noted.