Scania Q3 profit

Shorter workweeks,but they make money.

UPDATE 2-Scania Q3 profit falls less than forecast

Operating earnings tumbled to 519 million Swedish crowns ($76 million) from a year-ago 2.82 billion, topping the average 246 million seen in a Reuters poll of 16 analysts.
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"EBIT was better due to the cost savings biting better while at the same time they have raised capacity utilisation during the quarter," Handelsbanken analyst Hampus Engellau said.

"The order intake during the quarter is up for the third quarter in a row, and all in all it is better than expected on the back of Europe and Latin America ."
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Scania, which like its peers has scrambled to cut costs to cope with the downturn, said order bookings of its trucks fell 6 percent year-on-year in the third quarter compared with a 55 percent drop in the previous quarter.

"Compared to the second quarter of 2009, total truck order bookings increased by 30 percent and surpassed the level of deliveries," the company said.

"The European truck market is characterised by low economic activity, but in Scania's judgement the downturn in western European demand has now levelled off."

In Latin America, demand remained relatively strong while some recovery was seen in Asia , Scania added.

"The comments are pretty similar to what we heard from Volvo on last Friday. Western Europe has stabilized while Eastern Europe is still very weak," Sydbank analyst Morten Imsgard said. "There is nothing exciting with the comments, they are moving towards more stable markets, but on a very low level."

Scania, majority-controlled by Germany's Volkswagen (VOWG.DE

) after a $4 billion deal last year, said sales fell to 13.4 billion crowns from a year-ago 20.4 billion to come in just below the 13.6 billion seen by analysts.

Cash flow was positive to the tune of 1.1 billion Swedish crowns in the quarter, up from a 794 million a year ago, as sweeping cost cuts helped the group face the weaker demand.

Like a string of other Swedish engineering firms, Scania in June introduced a four-day working week and related pay cuts for 12,000 employees in its Swedish operations. [ID:nLF961471] (Editing by David Cowell) ($1=6.830 Swedish Crown)