Business News

MAN Reports Profit Jump, Raises Outlook and AP

Truck maker MAN said Wednesday that its third-quarter profit rose 32 percent on a gain in orders for its trucks and improving sales, and raised its outlook for the rest of the year.

The company said it expects order intake to rise at least 10 percent above 2006's total of 16.6 billion euros.

"We are positive for 2007 because we see…strong demand in Europe," Prof. Karlheinz Hornung, CFO of MAN, told "Worldwide Exchange."

MAN Raises Targets on Strong Earnings
MAN Raises Targets on Strong Earnings

"Western Europe is stable, but Eastern Europe is booming, so we are convinced that we can reach our targets," he added.

The Munich-based company earned 894 million euros ($1.29 billion) in the July-September period from 677 million euros a year earlier, while sales rose 12 percent to 3.5 billion euros, narrowly beating the 3.49 billion euros that analysts polled by Dow Jones Newswires had forecast.

Orders in the third quarter rose 17 percent to 4.7 billion euros ($6.77 billion) from 4 billion euros last year.

Strong Market

Hornung said he did not see an adverse impact from rising commodities prices.

"We hedge our commodities, non-ferrous metals like copper and aluminum, we have long-term contracts," he said. "We can also increase prices on this strong market."

Hornung added that demand will continue to grow in 2008, especially in Russia and Eastern Europe.

But analysts warned that the boom in the market for trucks may be nearing an end. Hans-Peter Wodniok, partner at Fairesearch, told "Squawk Box Europe" that the outlook for the next six to nine months was good but the question is how long can demand last.

"We are already, for a pretty long period of time, in the cycle, and we all know that this is a pretty cyclical industry," Wodniok said. "Eventually, in Europe we will see some moderation for demand growth."

Shares of MAN jumped 4.3 percent on the German DAX index Wednesday morning. They traded 3.4 percent up in the afternoon.

-- The AP contributed to this report