* Q1 order intake up 11 pct y/y vs forecast 15 pct fall
* CEO says demand upturn has carried into Q2
* Q1 EBIT 482 mln SEK vs forecast 2.0 bln SEK
* Shares up 1.9 percent
(Adds CEO, analyst comments, share prices, background)
By Niklas Pollard and Johannes Hellstrom
STOCKHOLM, April 25 Volvo, the
world's No. 2 truck maker, posted a surprise rise in
first-quarter orders and said it would step up production,
adding to signs a protracted slump in key markets like Europe
may be coming to an end.
The Swedish group, which makes heavy-duty trucks under the
Renault, Mack, UD Trucks and Eicher brands as well as its own
name, said on Thursday orders rose 11 percent year-on-year
compared with a 15 percent fall forecast by analysts.
"We saw this big uptick in the order intake come in at the
end of the quarter," Chief Executive Olof Persson told a news
"The uncertainty we had in the market during the second half
of last year and in the beginning of this year has been replaced
with more stability and our customers had more confidence to
actually place orders."
Volvo's comments come after domestic rival Scania
reported a 28 percent rise in orders earlier this week, and
world No. 1 Daimler Trucks forecast a slight rise in
Persson said Volvo and its suppliers would raise production
during the second quarter - a challenge as output of a slew of
new vehicles such as the new flagship FH series is ramped up.
The Gothenburg-based company would add around 400 staff in
its European production system in the second quarter, but only
on a temporary basis as it continued to treat evidence of
improving markets warily.
Volvo's caution was also reflected in its decision to leave
unchanged a 2013 outlook for roughly flat European and North
American truck markets and a forecast for 20 percent growth in
Brazil driven by government subsidies.
"What I can say is the good demand we have seen continued
also in the first weeks of the second quarter," Persson said.
Volvo shares, which had already racked up gains earlier in
the week, were up 1.9 percent to 92 Swedish crowns by 1010 GMT,
while Scania was up 0.1 percent, Daimler 1.3 percent and German
rival MAN SE 0.3 percent ahead of results on Friday.
"Many investors were very sceptical ahead of the Q1
earnings, so there should be some short positions to be closed
today," Carnegie analyst Kenneth Toll Johansson said in a note.
While a recovery may be just over the horizon, for now the
slow order intake at the end of last year is weighing heavily on
truck industry earnings.
Volvo, which also makes buses, construction equipment and
engines, reported a 92 percent plunge in first-quarter operating
earnings to 482 million crowns ($72.7 million), well below the
2.02 billion seen by analysts, as sales fell to their lowest
level since the 2008/2009 financial crisis.
The company, which unlike Scania sells into a relatively
sluggish U.S. market, last year launched a sweeping efficiency
programme running through 2015 to boost its profitability.
"Are we satisfied? Absolutely not. Will we improve? We have
to. Will we do it? Absolutely," Persson said. "But I have to
remind you this is a 3-year plan, so we have 33 months to go."
($1 = 6.6300 Swedish crowns)
(Additional reporting by Helena Soderpalm; Editing by Mark