Daimler Truck down 6% after cutting 2025 outlook on weak North America demand

Investing.com -- Daimler (OTC:MBGAF) Truck shares dropped more than 6% on Friday after the company lowered its 2025 earnings and sales guidance, citing weaker demand and deeper production cuts in North America.

The commercial vehicle manufacturer now expects full-year industrial EBIT between €3.1 billion and €4.2 billion, down from a previous range of €3.8 billion to €5.1 billion. 

Group EBIT guidance was also cut to €3.6 billion-€4.1 billion, from €4.4 billion-€4.9 billion. Both figures came in below market consensus of €3.9 billion and €4.2 billion, respectively.

Daimler Truck reduced its North American Class 8 retail sales forecast to 250,000–280,000 units from 260,000–290,000. 

Delivery guidance for Trucks North America was lowered to 135,000–155,000 units from 155,000–175,000. 

The company’s updated outlook implies a deeper production cut than retail sales, with Jefferies estimating as much as 50,000 units could be pulled back.

As a result, adjusted return on sales for the North America segment was revised to 10%-12%, from a previous 11%-13%. Other segment guidance, including for Mercedes Benz (ETR:MBGn), Asia, and Buses, remained unchanged.

Second-quarter group revenue fell 5% year-over-year to €12.6 billion. Industrial revenue came in at €11.8 billion, down 6% from a year ago. Adjusted industrial EBIT margin was 9.3%, ahead of consensus at 8.3%. 

Total (EPA:TTEF) adjusted operating income was €1.12 billion, a 4% decline from the prior year, but 6% above estimates.

By segment, North America reported €657 million in operating profit, up 4% from consensus. 

Mercedes Benz reported €283 million, 3% below estimates. Asia posted €64 million, up 8%, and Buses delivered €147 million, 13% ahead of expectations. Financial services underperformed with €23 million, well below the €55 million estimate.

Orders for the second quarter totaled 88,000 units, down 5% from the prior year. Orders in North America dropped 53% to 14,000 units. 

Mercedes Benz rose 24% to 41,000 units. Asia rose 2% to 30,000 units, and Buses rose 35% to 7,000 units.

“There are some indications that orders in the US may be seeing slightly better trends in July than what we’ve seen in the last few months,” said analysts at Jefferies in a note. 

Free cash flow guidance was reduced by 33%, now projected between €1.5 billion and €2.0 billion, down from €2.36 billion-€2.84 billion.