By Louis van Boxel-Woolf and Isabel Demetz
(Reuters) – Shares of Daimler Truck fell as much as 6.5% on Friday as the German truck and bus maker highlighted weakness in its European market after reporting first-quarter results that beat expectations.
Order intake fell 15% at Daimler Truck’s Mercedes-Benz (OTC:) business, which focuses on Europe, while orders rose 30% in the quarter at its North American truck business.
Shares were down 5.4% at 0848 GMT.
Daimler Truck was disappointed with order intake for Europe, according to Warburg Research analyst Fabio Hoelscher.
“Management appears to have become a little more cautious than before, based on the lower-than-expected order intake in the first quarter,” he said.
“The guidance remains intact, but it sounded like we’re moving more toward the lower than the higher,” he added.
Truck makers are aiming to boost margins as demand slows following the release of pent-up pandemic demand last year.
Price increases helped Volkswagen (ETR:)’s truck maker Traton beat expectations in the first quarter, with price increases at Volvo (OTC:) also partially offsetting a nearly 20% drop in order intake.
“Depressed sentiment” in Germany held Daimler Truck back in Europe, CEO Martin Daum said on an earnings call.
He said this had an outsized impact on Daimler Truck as its market share in the country was twice as high as in the rest of continental Europe.
Oliver Wojahn of mwb research said Daum’s comments raised “increasing doubts about the recovery of European markets, especially the key German market”.
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“Investors may prefer to watch from the sidelines to see how this unfolds,” he said.
Daimler Truck reported core profit of 1.21 billion euros ($1.30 billion) for the quarter, beating the consensus estimate of 1.17 billion euros in a company poll.
Core profit at Daimler Truck’s Mercedes-Benz business, which focuses on Europe, fell 4% compared to the same period last year. For the Trucks Asia division, core profit fell by 39%.
The North American operations reported a 7% increase in core profit in the quarter.
The maker of yellow Thomas Built school buses reiterated its guidance for the year.
($1 = 0.9317 euros)
(Additional reporting by Ilona Wissenbach, editing by Miranda Murray and Jane Merriman)
