Scania 1Q profits up 21 pct, but 2008 may be a rougher ride
STOCKHOLM, Sweden—Scania AB's first-quarter profits rose 21 percent on higher sales, but the Swedish truck maker said Monday that global economic uncertainty has slowed new orders.
Scania earned 2.51 billion kronor ($420.2 million) in the three months ended March 31, up from 2.09 billion kronor a year earlier.
The Sodertalje-based company said sales for the quarter rose to 21.99 billion kronor ($3.7 billion) from 19.13 billion kronor in the same period a year ago, as a result of both increased prices and higher sales volumes.
However, the company said orders fell 27 percent to 20,226 units at the end of the first quarter, from 27,637 units a year ago.
Evli Bank analyst Michael Andersson said the profit was better than expected and that the numbers looked very good, but said the sharp fall in orders was "worrying."
"It is a very difficult situation to judge. Is this a passing downswing or the beginning of a longer slowdown? I don't know right now," he said.
Shares in Scania fell 2.2 percent in Stockholm to 124.50 kronor ($20.84).
"Delivery times are currently 9-12 months, compared to a normal situation of 3-4 months. This, in combination with uncertainty about economic developments, is causing customers in Europe to hold off on submitting orders. Demand remains strong in Russia and other CIS countries, Latin America and the Middle East," Chief Executive Leif Ostling said in a statement.
Scania reiterated its sales growth forecast of more than 10 percent for 2007 to 2009.
The company, which is also the biggest single shareholder in MAN, is pushing for closer cooperation between the two companies under its own guidance.
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