May 5, 2014 / 7:00 AM / 6 years ago

UPDATE 1-MAN returns to profit on rising European truck demand

* Q1 orders drop 3 pct to 3.7 bln euros

* CEO “cautiously optimistic” on 2014 business

* Sticks to 2014 outlook for higher profit, lower sales (Adds CEO comment, detail on outlook)

BERLIN, May 5 (Reuters) - German truck maker MAN SE returned to profit in the first quarter as Europe’s fledgeling economic recovery lifts demand for heavy-duty commercial vehicles.

Operating profit rose to 68 million euros ($94.3 million), from a 98 million euro loss a year ago, the Munich-based group said on Monday, missing a consensus forecast of 104 million euros in a Reuters poll of analysts.

Quarterly sales of heavy-duty commercial vehicles weighing at least 16 metric tons were up 11.9 percent across the European Union excluding Malta to 52,300 models, Brussels-based auto industry association ACEA said last month.

But MAN, owned by Volkswagen, warned of a hangover in core European markets where companies last year rushed to buy older but cheaper trucks ahead of emission-rule changes, counting on rising demand in Russia and India.

“We are cautiously optimistic about the fiscal year and our first-quarter financial figures reinforce this outlook,” Chief Executive Georg Pachta-Reyhofen said in a statement.

MAN, which also makes diesel engines and turbines, expects full-year operating profit to show a “significant increase” beyond the 475 million euros achieved in 2013, keeping to its guidance published in March.

Group sales may dip slightly below the 15.7 billion euros posted in 2013, MAN said. The operating margin will clearly exceed last year’s 3 percent but fail to come in within a range of 2 percentage points around the long-term 8.5 percent target.

By comparison, MAN’s results in the first quarter of 2013 had been hit by about 140 million euros of provisions for a failed project at its power engineering division to build diesel-fuelled electricity plants. ($1 = 0.7212 Euros) (Reporting by Andreas Cremer; Editing by David Goodman)

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