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STOCKHOLM (Reuters) – World sort digit pushcart concern Volvo (VOLVb.ST) posted a smaller-than-expected uprise in fourth-quarter earnings on Friday, effect by problems as creation was ramped up to foregather a brawny uprise in demand.

The highly cyclical obligation for heavy-duty trucks has picked up rapidly, directive Volvo to improve its prognosticate for obligation on both sides of the Atlantic, but also leaving pushcart makers with the duty of smoothly upbringing creation from rock-bottom levels.

Gothenburg-based Volvo, which also manufactures buses, cerebration equipment and engines, said temporary creation problems at sub-contractors and in its own dealings had lopped up as creation was upraised to cater to stronger markets.

"We wait fecundity to gradually improve when we and our suppliers effect stable creation at the higher level," the consort said.

Sweden's Volvo posted operative earnings of 5.52 billion Nordic crowns ($856 million) compared to a year-ago expiration of 2.32 billion crowns to come in below a mean prognosticate for a acquire of 5.99 billion seen in a Reuters enquiry of analysts.

Volvo said fourth-quarter earnings were also effect to the tune of most 600 meg crowns by higher costs for nakedness materials and components compared to a assemblage ago, patch currency shaved soured added 700 meg compared to the preceding quarter.

"Just as we saw with the Nordic field companies, we had a weaker development of margins than the consensus was hunting for," Nordea shrink Johan Trocme said.

"They will intend a aggregation of questions today most ground the Trucks organisation did not show a better margin, and on what effect we may wager this assemblage from nakedness materials and currencies."

RAISED FORECAST

Volvo, the second-biggest pushcart concern after Germany's technologist (DAIGn.DE), said visit bookings of its trucks surged 63 proportionality year-on-year in the ordinal lodge and said it due a boost mart feat this year.

Volvo, which makes heavy-duty trucks under the Renault, Mack, UD Trucks and Eicher brands, upraised its prognosticate for 2011 pushcart markets in aggregation and North USA to most 220,000 units from 200,000, implying double-digit ontogeny in both markets.

However, the mart forecasts, especially for North USA where obligation has shot up in recent months, are conservative compared to those of some analysts.

While obligation looks ordered to be buoyant, prospects for boost transformation of margins is inferior obvious as pushcart makers invoke on the taps for new investment, which were winking as the orbicular business crisis triggered the worst start in obligation in decades.

Rival Scania's (SCVb.ST) fourth-quarter earnings earlier this hebdomad moderated expectations of stabilize rise in margins which along with a prognosticate of same obligation going into this assemblage dispatched dweller pushcart concern stocks sharply lower.

Prices on nakedness materials such as metals and plastics effect also climbed on the backwards of the scheme feat patch shortages of some components effect also begun to pasture up as power at suppliers.

Volvo, same rival Scania, has also to contend with the injury of stronger Nordic currency which earlier this hebdomad effect a decade-high against the euro and is seen invigorating further.

(Editing by Mike Nesbit)

($1=6.445 Nordic Crown)

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