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STOCKHOLM, April 25 (Reuters) - World number two truck makerposted first-quarter pretax earnings above market expectations on Friday and raised its market forecast for Europe, saying order intake there was "surprisingly strong".
Volvo reported a pretax profit of 6.14 billion Swedish crowns ($1 billion) versus a year-earlier 5.41 billion and a mean forecast of 5.71 billion in a Reuters poll of 17 analysts.
Demand in Volvo's main markets over the past year could hardly have been more disparate. While North America has been in the throes of a deep industry-wide slump, truck plants across Europe have been straining to keep up with bulging order books.
Fortified by the strong demand in Europe, as well as last year's purchase of Japanese truck makerDiesel, sales at the group rose to 76.7 billion crowns from a year ago 61.0 billion, though this fell short of the 77.15 billion seen by analysts.
A better gauge of current demand, Volvo's order intake of trucks fell 3 percent in January through March as bookings rose 8 percent from a low level in North America and fell 40 percent in Europe, the group's biggest market.
Analysts had voiced concern ahead of the report that recent financial turmoil had made customers wary to place orders, not least since long lead times, due to lack of industry capacity, meant trucks bought now would not be delivered until 2009.
The group, which sells trucks under the, Diesel and Mack brands as well as its own name, raised its outlook for European market growth this year to 10 percent from between 5 and 10 percent. It kept its forecast for a largely flat North American truck market in 2008 versus 2007. (Reporting by Niklas Pollard and Johannes Hellstrom; Editing by David Holmes)