Volvo, Daimler Post Stronger 2Q Results as Truck Sales Climb in North America
Daimler Trucks reported a 50% increase in worldwide operating income and record sales volumes in North America. Its earnings before interest and taxes jumped to a record 682 million euros (about $747 million) from 455 million euros in the same period last year.
Meanwhile, Volvo Group said quarterly operating income at its truck segment doubled to 4.41 billion Swedish kronor (about $512 million) compared with 2.17 billion kronor a year earlier — excluding restructuring charges and a capital gain of 2.14 billion kronor in the most recent quarter on the sale of its stake in Eicher Motors Ltd.
Daimler and Volvo rank first and second, respectively, as the world’s largest truck makers.
“During the first six months of 2015, the strong U.S. economy and increased demand for transport had a positive impact on demand for [longhaul] trucks while demand for trucks involved in the energy sector and in construction had a slower development,” Volvo said in its July 17 earnings report.
Despite the continued growth, the Gothenburg, Sweden-based manufacturer noted that equipment demand in North America has “started to soften from high levels” and predicted that the region’s truck market would peak this year.
Daimler Trucks, a unit of Stuttgart, Germany-based Daimler AG, said the main drivers of its earnings growth were higher truck sales in North America and Western Europe, positive exchange-rate and interest-rate effects and further efficiency improvements.
The truck segment’s revenue grew 19% to 9.44 billion euros from 7.97 billion a year earlier, the manufacturer said in its July 23 report.
Net sales at Volvo’s truck unit increased 18% to 57.06 billion kronor, including a 50% jump to 19.93 billion kronor in North America, where the group sells Volvo and Mack Trucks.
Volvo attributed its improved operating profit to “favorable currency development, somewhat higher sales as well as improved earnings in North America and somewhat higher profitability in Europe.”
Daimler, which sells Freightliner and Western Star models in North America, said second-quarter sales in the region climbed 20% to a record 49,388 units, including a 22% gain to 43,703 units in the United States. Worldwide sales dipped 1% to 125,113 trucks.
The company said its sales growth in North America was driven not only by the market’s overall strength but also by further growth in its market share.
Daimler said it captured 35.9% of the North American Class 8 market during the second quarter, up from 33.8% a year earlier. The company said its Classes 6-7 market share in the region inched up to 40.9% from 40.5%.
Incoming orders at Daimler Trucks were virtually flat in North America at 39,836 in the second quarter, while worldwide order intake slipped 1% to 123,539.
North American truck deliveries for Volvo Group climbed 19% to 17,839 units, part of a worldwide increase of 4% to 55,613. However, net order intake in North America fell 19% to 10,528 units and declined 6% to 49,551 globally.
For the Volvo brand, North American truck deliveries climbed 27% to 11,208 units in the quarter, but order intake dipped 1% to 8,151 units.
Mack delivered 6,547 trucks in the region, an 8% gain from a year earlier, but its order intake dropped 50% to 2,331.
Daimler said it expects the market for medium- and heavy-duty trucks to vary from region to region during 2015, and pointed to North America and Europe as the most promising markets.
“In North America, the main economic indicators suggest that demand for trucks will remain favorable despite a slight cooling off, so the market should expand by between 10% and 15%,” the company said.
Volvo projected that the North American retail market for heavy-duty trucks will peak this year at 310,000 units.
Paccar Inc., parent of Kenworth Trucks and Peterbilt Motors Co., is scheduled to report second-quarter results July 28.
In early June, Navistar International Corp. reported a net loss of $64 million, or 78 cents per share, for its fiscal second quarter ended April 30. That compared with a loss of $297 million, or $3.65, in the same period last year.
Meanwhile, truck dealership chain Rush Enterprises reported second-quarter net income of $19.6 million, or 48 cents per share, down slightly from $19.8 million, or 49 cents, a year ago.
CEO Rusty Rush cited “moderate freight growth driven by general economic improvement” during the quarter.
Rush, which sells new Peterbilt and International heavy-duty trucks, said its Class 8 sales increased 29% from a year earlier, accounting for 6.8% of the total U.S. market.
