Volvo sees signs of upturn after first-quarter earnings miss
STOCKHOLM (Reuters) - World number two truck maker Volvo (VOLVb.ST) posted a surprise rise in orders intake on Thursday amid signs key markets were pulling out of a deep slump that pushed its earnings to a deeper-than-expected fall in the first quarter.
After a year of slumping demand for commercial vehicles, there are tentative signs that activity in the hardest-hit region, Europe, has bottomed out, though only Latin America among major truck markets is yet showing any solid growth.
Volvo, the dominant global player in the industry alongside Germany's Daimler (DAIGn.DE), said order bookings of its trucks rose in several of its key markets to support a group-wide increase of 30 percent compared to the fourth quarter.
"That being said, the second quarter of 2013 will pose a challenge for us and our suppliers, with respect to the changeover to new products and the ramp-up of the industrial system to higher volumes," CEO Olof Persson said in a statement.
The Gothenburg-based company left unchanged its full-year outlook for roughly flat European and North American truck markets this year as well as its forecast for a 20 percent growth in Brazil driven by government subsidies.
The week had already seen cautious optimism spread across the truck industry after Volvo's domestic rival Scania (SCVb.ST) rolled out a 28 percent rise in order intake and Daimler Trucks forecast a slight rise in 2013 sales.
Volvo, which unlike Scania sells into a currently sluggish U.S. market, said order bookings of its trucks rose 11 percent year-on-year in the first quarter compared to the 15 percent fall seen by analysts in a Reuters poll.
But while a recovery may be just over the horizon, for now the slack demand is weighing heavily on truck industry earnings. Volvo said its profit was hit as sales volumes slumped to their lowest level since the height of the 2008/2009 financial crisis.
Volvo, which makes heavy-duty trucks under the Renault, Mack, UD Trucks and Eicher brands as well as its own name, suffered a 92 percent fall in first-quarter operating earnings compared to the 2.02 billion seen in a Reuters poll of analysts. ($1 = 6.6300 Swedish crowns)
(Reporting by Niklas Pollard and Helena Soderpalm)