Scania First-Quarter Profit Beats Estimates on Job Cuts
Stock Chart for Scania AB (SCVB)
Scania AB (SCVB), the Swedish truckmaker controlled by Volkswagen AG (VOW), reported first-quarter profit that beat estimates after the company eliminated jobs to prepare for slowing demand and raised prices on some models.
Net income fell 29 percent to 1.79 billion kronor ($266 million) from 2.51 billion kronor a year earlier, the Soedertaelje, Sweden-based company said in a statement today. Profit was more than the 1.54 billion-krona average of 10 analyst estimates compiled by Bloomberg. Sales declined 3 percent to 20.1 billion kronor.
“Lower vehicle deliveries and lower capacity utilization pulled down earnings, as did higher costs for future-related projects,” while “a more favorable market mix had a positive effect,” Chief Executive Officer Leif Oestling said in the statement.
Scania started cutting production globally by about 15 percent in January following a similar move in Europe in November as the sovereign-debt crisis deepened in the region. Scania let contracts lapse for most of its 1,400 temporary workers in Europe, and the majority of its temporary employees in Latin America also had to leave the company.
Industrywide registrations of heavy commercial vehicles in the European Union fell 11 percent from a year earlier in February, according to the European Automobile Manufacturers Association.
Scania rose as much as 5.1 percent to 133.7 kronor and was trading up 4.7 percent at 9:53 a.m. in Stockholm. The stock has gained 31 percent this year.
First-quarter new orders fell 19 percent to 15,809 trucks and buses, the Swedish company said today. Deliveries decreased 15 percent to 16,238 vehicles.
The manufacturer is the first large European truckmaker to publish first-quarter figures. Swedish competitor Volvo AB (VOLVB) is scheduled to report earnings on April 26. Stuttgart, Germany- based Daimler AG (DAI), the world’s largest truckmaker, plans to release profit figures on April 27, while MAN SE (MAN), the Munich- based commercial-vehicle manufacturer also controlled by VW, will publish its numbers on May 3.
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