Scania reports sharp profit jump

Swedish truckmaker Scania on Thursday reported a 44.7-percent surge in second-quarter net earnings but the results disappointed the market and the share price fell sharply.

Scania shares were down 12.12 percent at 159.5 kronor in mid-day deals on an overall Stockholm market was 1.46 percent weaker.

Scania said that in the April-June quarter its net profit rose to 2.008 billion kronor ($299 million) from the same period of 2006, an improvement it attributed to healthy sales.

Earnings before taxes showed a 45.9 percent jump to 2.895 billion kronor, which failed to meet market expectations of 3.046 billion kronor.

The operating margin of 13.6 percent, after 11.3 percent in the second quarter of 2006, also disappointed analysts, who had foreseen a margin of 15.2 percent.

Second quarter sales gained 16.3 percent to 20.911 billion kronor.

The company maintained its two-year forecast, which foresees average annual growth between 2007 and 2009 of 10 percent in sales and an operating margin of 12-13 percent.

On Wednesday another Swedish truck manufacturer, Volvo, said environmental standards in the United States had hit sales hard and dragged down profits in the second quarter.

Net profit fell by 13.9 percent on a 12-month comparison to 4.03 billion kronor for April to June, but the group said global demand for trucks was exceptionally strong.