Volvo, the world's second-biggest truck maker, reported a sharp rise in underlying third-quarter profits and raised its sales forecasts, sending its share price higher despite a hefty writedown.
Trucks have been a bright spot in a lacklustre autos sector as global growth has sparked increased demand. Companies have also so far been able to pass on rising raw-material costs in prices. Volvo shares were up 1.34 percent at 265 crowns in an overall weaker market, with analysts saying the underlying figures were good across the board.
"The market looks stronger than we could anticipate at the beginning of the year," Chief Executive Leif Johansson said in a statement on Friday as the group reported pre-tax profit in the three months of 1.4 billion crowns ($194.6 million).
This was after a 1.3 billion crowns write-off related to the restructuring of British bus group Henlys, signalled last week. But operating profits rose to 2.79 billion crowns from 1.62 billion. Of this, the truck division earned 1.77 billion crowns, up from 944 million.
"Given better-than-expected operational leverage in the truck business ... and higher volume growth in 2005, estimates for both ourselves and the market will need to be raised by around 5-10 percent," said Dresdner Kleinwort Wasserstein.
Volvo raised its 2004 forecast for the North American heavy truck market to about 240,000 from a previous 230,000 to 240,000 trucks, with a rise of another 15 to 20 percent in 2005.
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