UPDATE 3-Volvo sees firm growth as Q3 profit tops forecast

* Q3 pretax profit 4.9 bln SEK vs average forecast 4.3 bln

* Says truck orders rise 59 pct yr/yr in Q3

* Maintains 2010 market forecasts for Europe, North America

* Says sees further market growth next year

* Shares down 1.1 percent

(Adds analyst’s comment, more details, updates shares)

By Niklas Pollard and Johannes Hellstrom

STOCKHOLM, Oct 22 (BestGrowthStock) – Volvo (VOLVb.ST: ), the world’s
second-biggest truck maker, said market growth should remain in
double digits in both Europe and North America next year as it
rolled out stronger-than-expected quarterly earnings on Friday.

Volvo and rivals such as market leader Daimler (DAIGn.DE: )
have seen the highly cyclical demand for heavy-duty trucks pick
up in recent months after weathering the worst downturn in
decades due to the global financial crisis.

The firm posted an operating profit of 4.9 billion crowns
($736 million) in the third quarter, having lost 3.3 billion in
the same period last year. Analysts had on average forecast a
profit of 4.3 billion crowns, according to a Reuters poll.

Volvo shares were down 1.1 percent to 94.7 crowns by 0821
GMT as the company rolled out little in the way of positive
surprises after seeing its shares surge more than 50 percent
this year on the hopes of a robust recovery.

“We think the figures were quite good overall,” Swedbank
analyst Niclas Hoglund said.

“What is making the market a bit uncertain is that they had
hedging gains at the group level of 598 million crowns, and
adjusted for that the earnings look a little bit less strong.”

Daimler shares were down 0.5 percent.

The recovery has been led by booming growth in emerging
markets in Latin America and Asia, but truck markets in Europe
and the United States have also rebounded from lows hit during
the crisis as the broader economy has improved.

Gothenburg-based Volvo, which also makes buses, construction
equipment, engines and aerospace components, said order bookings
for trucks rose 59 percent year-on-year in the third quarter.

Volvo, which makes heavy-duty trucks under the Renault,
Mack, UD Trucks and Eicher brands, also repeated its forecast
for the truck market to grow about 10 percent in Europe this
year and 20-30 percent in North America.

The company said it expected market demand to rise further
next year and reach a level above 200,000 vehicles in both North
America and Europe, implying growth of roughly 10 percent in
Europe and 30 to 40 percent in North America.

But Volvo also injected a note of caution.

“For 2011 it is difficult to assess what impact austerity
packages in Europe will have on the overall economy,” the
company said, adding that the economic recovery in the United
States remained weak.

GAINS

European car sales have dipped in recent months, smarting
from the loss of government incentives to encourage new
purchases. [ID:nLDE69D2E7]

In sharp contrast, demand for heavy-duty commercial
vehicles, which was not propped up by government schemes during
the crisis, has risen strongly. Industry-wide sales climbed 34
percent in August alone. [ID:nLDE68N0CY]

Fortified by sweeping cost cuts during the downturn, Volvo
has seen the growing demand lift earnings in recent quarters
while its shares have gained about 50 percent since the start of
the year, in line with gains for MAN and Scania.

Capitalising on Volvo’s rising share price, its biggest
owner, French carmaker Renault SA (RENA.PA: ), unloaded about 3
billion euros worth of shares this month though it remained the
most influential voting shareholder. [ID:nLDE6960DD]

Volvo is the first of Europe’s blue-chip commercial vehicles
makers to unveil its third-quarter results. Figures from its
domestic rival Scania (SCVb.ST: ) are due on Oct. 25 and Germany’s
Daimler and MAN SE (MANG.DE: ) are both scheduled for Oct. 28.
($1=6.658 Swedish crowns)
(Reporting by Stockholm newsroom; Editing by Greg Mahlich, Mike
Nesbit)

UPDATE 3-Volvo sees firm growth as Q3 profit tops forecast