Swedish truck maker Scania on Tuesday reported higher-than-expected first-quarter profits and raised its outlook for market demand this year, sending its shares higher.
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But it warned that a switch to production of its new R-series trucks would limit its capacity to deliver vehicles this year, Reuters noted.
Europe’s third-biggest truck maker made pre-tax profit of 1.32 billion crowns ($US172 million) in the January-March period, against 1.19 billion expected on average in a Reuters poll of 11 analysts and 1.15 billion in the year-ago period.
Sales rose to 13.08 billion crowns, also beating the consensus forecast of 12.79 billion, up from 12.18 billion a year earlier, the report said.
“Sales were a little bit stronger than I had expected as was the operating margin,” Swedbank analyst Anders Bruzelius told Reuters.
Scania’s operating margin was 10.8% in the quarter against 10.6% in the fourth quarter of 2003. It was more than twice that of bigger rival Volvo which on Friday reported almost a quadrupling of first-quarter profits, helped by a strong demand recovery in North America, the news agency said.
According to Reuters, Scania will switch to producing R-series trucks in most factories in Europe in the third quarter and said the move would limit its ability to make deliveries.
“It means that if the market accelerates, we will not be able to respond,” chief executive Leif Ostling told Reuters.
But analysts reportedly said they were not very concerned. “The changeover of production will certainly have an impact, but it should already have been taken into account in market expectations of the company”, one analyst said.
Ostling told Reuters he expected the market for trucks in Europe to grow 4-6% this year, upgrading his February assumption of a flat market and matching a similar forecast by Volvo.
“It (the market) has turned positive, but it’s hard to say if the rise will be 4, 5 or 6%,” Ostling reportedly said.
Scania, which unlike Volvo does not sell trucks in North America, saw truck orders from its main market, western Europe, rise 14% year-on-year and group orders rise 17%, Reuters said.
But Volvo’s orders in western Europe rose 29% in the quarter as it had launched new truck models earlier than Scania and its trucks are cheaper. Scania’s market share in western Europe therefore fell to 13.2% from 14.7%, the report noted.
