Daimler Truck shares fall as group flags concerns over European demand

Investing.com — Shares in Daimler Truck (ETR:) dropped on Friday after the German firm flagged weakness at its European operations despite reporting better-than-anticipated first quarter returns.

In a call with analysts following the release of its latest three-month earnings, Chief Executive Martin Daum warned that a “depressive” sentiment in Germany was weighing on demand in Europe. He added that because Daimler Truck has a large presence in Germany as compared to the rest of Europe, weakness in the country threatens its performance throughout the region.

Truckmakers like Daimler Truck have been contending with tepid sales following a post-pandemic surge, although price hikes have helped some of these firms to offset a dip in order intake and bolster margins.

Order intake at Daimler Truck’s Europe-focused Mercedes-Benz (OTC:) unit slumped by 15%. Core profit at the division dropped by 4%.

Analysts at Jefferies noted that results at the firm’s financial services segment were also “slightly weaker” due to an uptick in cost of risk.

However, group-wide core profit of 1.21 billion euros for the quarter still topped estimates of 1.17 billion, according to a company-provided poll cited by Reuters, thanks in part to resilience in the company’s North American division.

Elsewhere, Daimler Truck reaffirmed its guidance for full-year deliveries of 490,000 to 510,000 and sales of 55 billion euros to 57 billion euros.