Daimler Truck reported higher second-quarter profits and revenue, but like OEMs reporting earlier, the market leader saw incoming orders fall.
The German truck and bus maker said net profit rose to 1 billion euros ($1.1 billion) from 946 billion euros in the second quarter of 2022. Revenue increased to 13.88 billion euros from 12.1 billion.
Rivals Paccar Inc., Volvo Group and Traton SE reported similar trends based on their size. All the companies have strong backlogs of unbuilt trucks, so accepting more orders now would push out delivery dates. Traton’s Navistar specifically mentioned that strong orders at the end of 2022 delayed the opening of order books.
1st time to hit double-digit return on sales
Adjusted earnings before interest and taxes climbed 41% to 1.43 billion euros. Adjusted return on sales (ROS) was 10.3%, the first time Daimler Truck has achieved a double-digit ROS since splitting off from Daimler AG in December 2021. ROS a year ago was 8%. The 10% ROS was a goal for 2025.
“This is an important milestone proving our commitment to uplift profitability,” CFO Jochen Goetz said in a news release. An improved supply chain performance, strong pricing and a growing service business all contributed. All four operating units raised ROS goals for the year:
- Trucks North America (Daimler Truck North America): 11%-13% from 10%-12%.
- Mercedes-Benz (European-branded trucks): 8%-10% from 7%-9%.
- Trucks Asia: 4%-6% from 3%-5%.
- Daimler Buses: 3%-5% from 2%-4%.
Unit sales grew 9% to 131,888 from 120,961 in the same period a year ago. Daimler Truck North America sold 50,618 units, up 14.7% from 44,124 a year ago. Incoming orders declined 13% to 96,936. Earnings per share fell slightly to 1.11 euros from 1.12 euros.
Daimler affirmed end-of-decade projections shared with analysts during its Capital Market Day in Boston on July 11:
“Our strong figures for the first half of this year underscore our positive momentum,” CEO Martin Daum said. “Daimler Truck keeps going strong. Our entire team is determined to make 2023 another record year.”
Related articles:
Daimler Truck flexes financial muscle a year after going solo
Paccar price hikes propel Q2 profit surge
Volvo Group surges to Q2 profit record amid signs of a cooldown
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