Weakness in Europe drives down Daimler Truck shares
Reuters
Published May 03, 2024 06:06
Updated May 03, 2024 13:05
By Louis van Boxel-Woolf and Isabel Demetz
(Reuters) -Daimler Truck shares fell as much as 6.5% on Friday as the German truck and busmaker highlighted weakness in its European market after reporting first-quarter results that beat forecasts.
Order intake fell 15% at Daimler Truck's Mercedes-Benz business, which focuses on Europe, while in its North American truck business orders rose 30% in the quarter.
The shares were down 5.4% by 0848 GMT.
Daimler Truck disappointed with its order intake for Europe, Warburg Research analyst Fabio Hoelscher said.
"Management appears to have become slightly more cautious than before, based on lower than expected order intake in Q1", he said.
"Guidance remains intact but it sounded like we are heading more towards the lower than the higher end", he added.
Truckmakers are aiming to boost margins as demand slows following the release of pent-up pandemic demand last year.
Price rises helped Volkswagen (ETR:VOWG_p)'s truck-making business Traton beat expectations in the first quarter, with price hikes at Volvo also partially offsetting an almost 20% fall in order intake.
"Depressive sentiment" in Germany was holding back Daimler Truck in Europe, CEO Martin Daum said on an earnings call.
He said that this had an outsized impact on Daimler Truck since its market share in the country was twice as high as for the rest of continental Europe.
Oliver Wojahn of mwb research said Daum's comments were causing "increasing doubts that a recovery of European markets, especially the most important German market" would come.
"Investors might prefer to watch from the sidelines to see how this unfolds," he said.
Daimler Truck reported core profit of 1.21 billion euros ($1.30 billion) for the quarter, beating the consensus estimate of 1.17 billion euros in a company poll.
Core profit at Daimler Truck's Mercedes-Benz business, which focuses on Europe, fell 4% compared with the same period last year. For its Trucks Asia business core profit fell 39%.
The North America business reported a 7% rise in core profit in the quarter.
The maker of yellow Thomas Built school buses reiterated its guidance for the year.
($1 = 0.9317 euros)
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(Additional Reporting by Ilona Wissenbach, Editing by Miranda Murray and Jane Merriman)
Written By: Reuters
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