FRANKFURT (Reuters) -- German truckmaker MAN, which hopes to merge with Swedish rival Scania, reported operating profit in the first quarter grew by half and hiked its 2007 earnings forecast.
Operating profit jumped 51 percent to 318 million euros ($433.8 million), the company said today, far better than an average estimate of 276 million euros from a Reuters poll of 18 analysts.
Net profit also rose by half to 228 million.
After previously targeting an operating margin of 9.0 percent, MAN now expects full-year profitability to match the first-quarter level of 9.6 percent, it said in a statement.
Revenue at the industrial conglomerate jumped 15 percent to 3.3 billion euros while order intake gained nearly a quarter to 4.8 billion.
MAN also raised its turnover target to an increase of around 10 percent and forecast orders would not decline but rather stabilize at around last year's level of 16.6 billion euros.
The Munich-based firm scrapped a hostile 10 billion euro cash and stock bid for Scania in January but continues to harbor hopes that joint large shareholder Volkswagen will push hard enough for a three-way merger of their truck operations that Scania's resistance could buckle.
Although MAN has since repeated its interest in a friendly merger, Scania has shown little public interest in deepening ties and the Swedish company's protective shareholder Investor has done little to prod it along.
Scania reported a 42 percent gain in first quarter pretax profit, easily beating market expectations, and forecast truck demand would remain strong in Europe through 2007.
Investors are now paying nearly 40 percent more for the shares in all three major European truckmakers including Volvo versus the value seen on Jan. 23, when MAN withdrew the offer for Scania.