Daimler Trucks buoys Daimler AG earnings on strong North American sales

Daimler Trucks sold more vehicles in quarter three than a year ago, but its parent company, Daimler AG (CXE: DAI), saw revenue flat for the third quarter at $45.8 billion (40.2 billion Euros). The company said it sold 794,700 vehicles, both cars and commercial vehicles, worldwide in the third quarter, 4% fewer than a year ago.

“The automotive industry and thus also Daimler are still in a very challenging environment. The continued high demand from our customers makes us confident for the fourth quarter,” stated Dieter Zetsche, chairman of the Board of Management of Daimler AG and head of Mercedes-Benz Cars.

Daimler Trucks helped offset lower automotive sales and revenue with a strong performance across the globe, led by NAFTA region sales, which reached 52,700 units in the third quarter, up from 45,300 in Q3 2017. In Latin America, sales increased to 9,800 units, up 1,800 units from 2017, while EU30 (European Union, Switzerland and Norway) saw sales increase to 21,900 units, up from 20,900 in the prior period. Deliveries of trucks in Asia increased to 42,300 units, from 40,000, and sales in Indonesia were up 50% to 17,800 units.

The entire division saw unit sales of 136,100, up 8% year-over-year.

Higher material costs and supply chain constraints held down revenue in the Trucks group, Daimler said, but it still exceeded Q3 2017 at $11.4 billion, up from $10.5 billion.

Daimler’s Mercedes-Benz Vans unit saw a 2% decrease in revenue to $3.4 billion due in part of delivery issues of its Vito, V-Class and Sprinter models. In the NAFTA region, van sales set a record with 13,000 units in the third quarter. China (9%) and Latin America (13%) also posted gains in units sold.

Revenues were also negatively impacted due to expenditure on new technologies and future products and related to a model change for the Sprinter, Daimler said. “EBIT was also reduced by expenses in connection with ongoing governmental proceedings and measures taken for diesel vehicles as well as lower unit sales caused by delivery delays,” the company noted.

Daimler continues to expect sales in its Trucks unit to be up in the NAFTA region in 2018 over 2017, saying it will experience a “significant sales increases compared with 2017 as a result of the market recovery there.”

Van sales are expected to be strong for the year as well, particularly in China and the U.S.

Despite this, ongoing “governmental proceedings” are expected to affect the overall Daimler AG business, the company said. Those issues are related to a diesel emissions issue on certain Mercedes-Benz diesel vehicles and vehicles that use the refrigerant R134a.