Daimler Truck Reports 4% Revenue Decline in Q2
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Daimler Truck Holding AG reported a decline in revenue and earnings as operations faced headwinds in Europe and Asia during the second quarter of 2024, the company announced Aug. 1.
The German truck manufacturer posted a net profit of $860 million, or $1.01 per share, for the three months ending June 30. This compares to $1.09 billion, or $1.21, during the same period last year. Total revenue decreased by 4% to $14.50 billion from $15.15 billion.
“Daimler Truck has delivered overall solid results on group level in the second quarter,” said Daimler Truck CEO Martin Daum. “Leaving aside the negative one-time effect of the impairment in China, our adjusted return on sales for the industrial business would have been again double-digit.”
The company faced increased headwinds in key regions during the quarter, mainly in Europe and Asia. However, there was strength in other areas such as buses, financial services and sales of battery-electric vehicles, which grew 69% to 648 vehicles from 383 a year ago.
Daum
Daimler Truck previously disclosed the fully impaired at-equity book value of its China joint venture Beijing Foton Daimler Automotive Co. Due to the negative impact of the current market and economic situation in China, the venture had a negative one-time, non-cash impact of $130.8 million on adjusted earnings before interest and taxes (EBIT) for its Asian operation and industrial business in Q2.
The company highlighted its North America and buses units as delivering record quarterly results. Daimler Truck North America revenue increased 1% to $6.56 billion from $6.51 billion year over year. Unit sales declined 5% to 48,230 from 50,618. The results were supported by improved net pricing and a favorable sales mix.
RELATED: Daimler Truck North America Q2 Sales Fall 4.7% Year-on-Year
“The segments Trucks North America and Daimler Buses have shown an excellent performance with record margins,” Daum said. “However, demand in key truck markets particularly in Asia and Europe has weakened, giving us stronger headwinds.”
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Daimler Buses revenue rose 29% to $1.38 billion from $1.07 billion. Unit sales increased 8% to 6,648 from 6,181. Significantly higher unit sales, improved net pricing and effects from the sales mix contributed to the overall positive results.
Mercedes-Benz revenue fell 17% to $4.99 billion from $6.05 billion. Unit sales decreased 22% to 30,604 from 39,236. The market environment in core European truck markets became more challenging, resulting in lower unit sales, an unfavorable sales mix and underutilized production.
Trucks Asia revenue decreased 16% to $1.54 billion from $1.84 billion. Unit sales fell 29% to 28,342 from 40,097. The report noted weakening market demand as headwinds began picking up.
Bangston
Financial Services revenue increased 31% to $904 million from $689 million. New business rose 19% to 2,985 from 2,507. The results were driven by higher cost of risk in America, mainly due to the ongoing freight recession.
On July 31, a day before the earnings report was released, Daimler Truck announced that Kevin Bangston had been appointed the next president and CEO of Daimler Truck Financial Services North America. He is expected to start Sept. 1.
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