Key Takeaways:
Daimler Truck AG (DTGGe.DE) maintained its full-year guidance after first-quarter orders in North America surged 86 percent, signaling a strong U.S. recovery despite a sharp fall in quarterly profit.
"We are well positioned for continued improvement over the course of the year, even against the backdrop of a challenging first quarter," Chief Executive Karin Radstrom said in a statement.
The German truck maker’s adjusted earnings before interest and taxes for the first quarter fell to €498 million from €1.08 billion a year earlier. Revenue from its industrial business declined 14 percent to €9.14 billion, with the adjusted return on sales in North America dropping to 5.4 percent from 14.4 percent.
Despite the profit drop, the order book strength provides a buffer against what the company termed "tariff headwinds" in North America. Daimler Truck confirmed its full-year forecast for an adjusted return on sales of 6 percent to 8 percent on revenue of €42 billion to €46 billion.
The first-quarter performance was hit by a 25 percent decline in North American sales to 29,432 vehicles and what finance chief Eva Scherer called the "full tariff effects" being reflected for the first time. The headwinds from sales decline, tariffs, and adverse currency effects cost the North American division €624 million in the quarter.
The increase in order intake, which was "far better than hoped" according to one Frankfurt-based trader, suggests a potential demand recovery in the key U.S. market. The positive outlook mirrors recent reports from European rivals Traton SE and Volvo AB, which also saw strong order growth.
The strong forward-looking orders suggest management is confident in overcoming the current margin pressures from tariffs and weak demand. Investors will now watch the second-quarter results to see if the order book translates into higher sales and improved profitability.
This article is for informational purposes only and does not constitute investment advice.
