Truck maker MAN AG said Thursday that its third-quarter profit rose 33 percent despite a decrease in orders during the third quarter. Investors were not spooked, sending MAN shares up 7.5 percent to 36.43 euros ($46.57) in Frankfurt trading.
Despite the gains, the company warned that financial turmoil, along with high fuel prices, could slow demand for its trucks.
"High fuel prices and tougher financing conditions have caused considerable uncertainty among our truck customers and led to a slowdown in purchases," Chief Executive Hakan Samuelsson said in a note to shareholders.
The Munich-based company, which is celebrating its 250th anniversary this year, earned 298 million euros ($392 million) in the July-September period compared with 223 million euros a year ago.
The company said its net income from January to September rose to 1.07 billion euros ($1.37 billion) from 894 million euros a year earlier. That was lifted in part by a dividend payment during the period from Swedish truck maker Scania AB, in which MAN owns a stake and tried unsuccessfully to acquire outright last year in a 10.3 billion euro hostile takeover.
Germany's Volkswagen AG owns significant stakes in both MAN and Scania and has pushed for closer cooperation between the two companies under its own guidance.
Third-quarter sales totaled 3.6 billion euros ($4.6 billion), a 16 percent increase from 3.1 billion euros a year earlier. Nine-month sales were up 18 percent to 11 billion euros ($14.05 billion) from 9.3 billion euros.
MAN said orders fell 30 percent in the third quarter to just more than 3 billion euros ($3.8 billion) compared with last year's 4.4 billion euros. From January to September, orders were down 9 percent to 12 billion euros ($15.3 billion) from last year's 13.3 billion euros.
"We are forecasting a reduction in the order intake for full-year 2008, due mainly to the significant drop in orders in the commercial vehicles business area," the company said in a statement.
Earlier this month, Sweden's Volvo AB was hit hard by slack demand when previously placed truck orders that were canceled.
After Volvo cleaned out those orders from its books, the net order intake in the third quarter was a mere 115 trucks, compared to nearly 42,000 trucks in the same period last year.
Samuelsson said that deteriorating economic conditions made it difficult, if not impossible, to provide a forecast for next year.
He also said the company planned to reduce the number of temporary workers to ease overall output.
The company's new orders for trucks and buses, a key barometer of how future sales may pan out, careened 39 percent lower in the third quarter to just 1.9 billion euros ($2.4 billion) compared with 3.2 billion last year.
MAN said it was looking at a likely reduction in full year orders through the end of 2008, but did not elaborate.
But its high backlog of current orders is expected to cushion the blow of slower growth and expects to deliver 100,00 new trucks this year.
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