(Adds share reaction, analyst comment)
By Patrick McLoughlin
STOCKHOLM, Oct 27 (Reuters) - Scania , Europe's third-biggest truck maker, posted a gain in third-quarter pre-tax profit just below expectations on Monday but said demand in its main Western European market could improve next year.
Scania posted pre-tax profit of 765 million crowns ($99.4 million), compared with a consensus estimate of 771 million in a Reuters poll of 14 analysts, and with the year-ago figure of 532 million.
Scania shares were up 0.7 percent at 1247 GMT, underperforming a Swedish market, whose benchmark OMX index was up just over one percent.
"The report was about in line with expectations, except for sales which were somewhat stronger than the markets had believed," said an analyst. "The most striking was the weak order income in Western Europe, which underlines how insecure markets there are just now."
Sales of 11.6 billion crowns exceeded both the expectations for 10.47 billion and the year-ago figure of 10.38 billion.
In the first nine months of the year Scania's order bookings for heavy trucks in Western Europe declined by 12 percent to 19,843 units from the year-ago's 22,619. Western Europe accounts for about two thirds of Scania's sales.
"Economic growth in Scania's main markets in Western Europe was weak but is expected to improve somewhat next year," Chief Executive Leif Ostling said in a statement. "Earnings for the rest of 2003 are expected to remain at a satisfactory level."
In Latin America order bookings for trucks jumped 33 percent, and orders in Central and Eastern Europe rose eight percent.
"Increased demand from markets outside Western Europe could not offset the downturn in the Western European market," Ostling said.
Analysts have said that demand this year in the Swedish truck maker's core segment -- trucks at the top end in terms of power and performance -- has remained fairly stable, despite an overall downturn in the truck market in Western Europe.
The truck industry, which tends to reflect wider economic conditions, has suffered in the last two years from slumping demand on both sides of the Atlantic, with most players hit.
But last week the world's number-two truckmaker, AB Volvo , beat expectations with its third-quarter profits and raised its forecast for total demand for heavy trucks in Europe.
Additionally, the truck unit of Germany's MAN said it expected significantly stronger profits this year and next and forecast a slight pick-up in European truck demand in 2004.
Since the start of the year Scania shares have risen by almost a third, outperforming the DJ Stoxx Auto index by more than 15 percent. (Additional reporting Jennie Dehlen, Stockholm)