Daimler Truck Shares Drop As Firm Cuts Guidance on U.S Weakness

Daimler Truck shares (ETR:DTG) are under pressure today, with the firm slashing its full-year adjusted profit forecast triggering a sharp sell-off. The German truck manufacturer attributes the revision to weakening market conditions in North America, a key region for the company.

Shares in Daimler Truck are down 4.9% early, reflecting concerns over the revised outlook. This decline comes after what had been a bit of a rally in DTG, with the price looking like it wanted to retest €45 just 1 week ago.

Revised Outlook

The company now anticipates full-year adjusted profit to range between €3.6 billion and €4.1 billion, a substantial reduction that represents a potential drop of up to 23% compared to earlier projections. This revision stems from a lowered sales volume outlook specifically for the North American market, which accounted for 44% of Daimler Truck’s revenue in 2024.

CFO Eva Scherer pointed to a noticeable slowdown in order levels, stating that “after a strong first half, recent months have shown a clear slowdown in orders, prompting adjustments in capacity and market guidance.” The company is now adjusting capacity in light of the reduced demand.

Daimler Truck is also considering strategic operational changes to navigate the challenging environment.

The company is contemplating exiting manufacturing operations in China, citing ongoing global economic challenges, weakening demand in Europe, and geopolitical pressures. CEO Karin Rådström has emphasized the difficulties in maintaining profitability in the Chinese market, despite its technological advancements.

A final decision regarding the company's China operations is expected by the end of the year. Furthermore, Daimler Truck plans to cut 5,000 jobs in Germany by 2030 as part of a broader restructuring effort aimed at reducing costs and improving operational efficiency.

The challenges faced by Daimler Truck are not unique within the industry. Other major truck manufacturers, such as Volkswagen's Traton, have also reported concerns over weakening U.S. demand and global economic uncertainties, highlighting broader difficulties in the heavy-duty truck market.

The combination of reduced profit forecasts, potential market exits, and workforce reductions underscores the significant challenges ahead.