2nd UPDATE: MAN 2Q Net Profit Higher, Expects Better Sales, Orders in 2010

Truck maker and engineering firm MAN SE (MAN.XE) Thursday reported a jump in second-quarter net profit driven by improving demand for new vehicles, and said it expects full-year revenue and orders to rise after a woeful 2009 in the wake of the financial crisis.

"MAN's key performance indicators have improved significantly compared with the difficult year 2009," MAN said in a statement, noting however that "many areas still have a long way to go to return to the high levels of capacity utilization in previous record years."

Net profit soared to EUR151 million from EUR27 million in the second quarter, with net profit attributable to shareholders at EUR153 million, up from EUR22 million. Operating profit rose on the year to EUR276 million from EUR144 million.

Revenue was up at EUR3.61 billion from EUR3.11 billion last year. Order intake, an important gauge for future business, increased in the second quarter to EUR3.75 billion from EUR2.28 billion last year.

Analysts had expected operating profit of EUR235 million, revenue of EUR3.51 billion and order intake of EUR3.38 billion.

MAN attributed its good performance overall to its commercial vehicle operations, and noted especially strong demand in Brazil. Commercial vehicles' orders in the first half were up 70% and revenue grew 32% in the division.

First-half orders in the power engineering engine division grew 39% while revenue declined 6%.

For the full year, MAN said it expects "a significant increase" in orders, a rise in revenue of over 10% and a return on sales at the level of the first six months. MAN didn't provide a specific earnings outlook, but is due to host a conference call later Thursday.

Global truck makers were hard hit by eroding demand for vehicles during the economic downturn, but increasing signs of an industry recovery in several key markets have sparked optimism that recovery is firming up.

Last week, Swedish peer Scania AB (SCV-A.SK) reported a robust return to net profit in the second quarter and said vehicle deliveries in the third quarter are expected to remain steady, echoing a rise in revenue at AB Volvo (VOLV-B.SK).

Daimler AG (DAI.XE), the world's largest truck maker by sales, Tuesday reported a significant sales improvement in all of its major markets.

MAN is currently in talks over reaping cost synergies as part of a truck alliance with Volkswagen AG (VOW.XE) and Scania. Volkswagen holds a majority stake in Scania and is MAN's largest shareholder with a 29.9% stake.

Cooperation talks have made little progress in recent years. Volkswagen has so far remained tight-lipped about the prospects for a closer tie-up and the time frame for achieving significant efficiency savings still remains vague.

However, in April Volkswagen's influental supervisory board chairman Ferdinand Piech, who holds the same post at MAN, said he was optimistic about forging a closer tie-up and reiterated that cost savings of up to EUR1 billion could be reached if the companies cooperate and share costs, for example, related to the upcoming Euro6 emission regulation. He pledged at the time to allocate more time to the truck project after Volkswagen and Porsche Automobil Holding SE (PAH3.XE) ended their feud last year.

-By Christoph Rauwald, Dow Jones Newswires; [phone]; [e-mail]

(Sarah Sloat in Frankfurt contributed to this article.)