Swedish truck maker posts profit well above analysts' forecast.

• Volvo's profits rally as global demand recovers

Scania, the Swedish truckmaker controlled by Volkswagen AG, Friday reported a robust return to net profit well above analysts’ expectations as global demand recovered and operating margin reached a record-high.

“Higher vehicle volume, significantly increased capacity utilisation and cost reductions that were implemented last year mainly explain the improvements”, the company’s chief executive officer Leif Östling said.

Orders for trucks and buses in the second quarter rose to 20,877 vehicles from 16,151 vehicles in the first quarter 2010 and from 8,223 vehicles a year earlier. 

"Demand in the European truck market improved during the period from a very low level last year. The recovery was limited by overcapacity among hauliers and low freight prices", Leif Östling said, adding that demand in markets outside Europe is generally at a good level.

Net income amounted to 2,372 million kronor ($325 million), up sharply from a previous loss of 150 million kronor. Operating margin in the second quarter reached a record-high 17 percent.

"Orders stand out, as does the record margin of 17% and the outlook is strong," Niclas Höglund, analyst at Swedbank, told Dow Jones. "This report underpins the attractiveness of the truck sector."

The heavy truck sector suffered very badly in the global economic slump, with orders plummeting. Germany's Daimler and Sweden's Volvo, which dominate the market with MAN, recently reported better-than-expected earnings as they too benefited from the recovery.

Volvo trucks, the second-biggest maker of heavy vehicles, reported unexpectedly strong quarterly profits on Thursday and stood by its forecast of recovery in US and European markets. In the three months through June, net profit was 3.15 billion kronor ($425 million) from a record loss of 5.57 billion kronor for the same period last year. Sales showed a 12-month jump of 27.0 percent to 68.8 billion euros.

Scania said Thursday it may cooperate with Germany's MAN SE on technology and research.

“After a preliminary analysis, we have concluded that with this kind of joint component supply there are potential synergies without jeopardizing our strong brand identities and the individuality of our products,” Leif Östling said. “Both companies and all shareholders should profit from the collaboration.”

Scania employs some 33,000 people and operates in about 100 countries.