Daimler Trucks Profit Doubles, Volvo Swings Back to Profitability
Profit for truck, engine and carmaker Daimler AG soared in the first quarter of the year, while competitor Volvo has reported a profit following a loss a year ago
Profit for truck, engine and carmaker Daimler AG soared in the first quarter of the year, while competitor Volvo has reported a profit following a loss a year ago
Earnings before interest and tax for the Germany-based Daimler rose to €2.07 billion, or $2.9 billion, up from €949 million in the year-earlier period, according to Reuters.
Worldwide, Daimler sold 565,800 cars and commercial vehicles in the first quarter, more than ever before, and increased sales by 13% from the first quarter of 2013.
Unit sales of 108,500 vehicles in the first quarter by Daimler Trucks were 7% above the prior-year level. Revenue increased by 1% to €7.1 billion or $9.85 billion. Daimler Trucks’ earnings before interest and taxes of €341 million, or $473 million, was substantially higher than in the prior-year period at €116 million, or $161 million
Increased unit sales in the North American region and Asia contributed positively to the development of earnings.
“Global demand for medium- and heavy-duty trucks in the year 2014 can only be expected at around the level of the previous year, Daimler said in a release. “With the exception of North America, no significant dynamism is to be expected in most of the core markets. On the contrary, downward risks exist in some emerging markets due to the current turbulences.”
In North America, the company anticipates market growth of around 10% “due to the increasing economic momentum” and “unit sales should benefit from the expected market expansion and should significantly surpass the level of the year 2013.”
Meantime, profit for rival AB Volvo of Sweden are also way up, with it reporting a net profit 1.08 billion Swedish kronor, or $164 million, from a year-earlier loss of 304 million kronor, according to the Wall Street Journal.
Sales in the quarter were 65.65 billion kronor, up 13% from 58.34 billion kronor a year earlier, while operating income soared more than 450% to 2.27 billion kronor, or $345 million, from 482 million kronor a year earlier.
The company, which sells trucks and engines under the Mack and Volvo names, says truck orders worldwide fell 10% during the quarter, but were up 22% in North America. European orders fell 26% due to new emissions rules, according to the company.
“In addition to replacement demand, the increase [in North America] can be attributed to growing customer confidence in the economy, strong freight demand and increased construction activity. Supported by the recent market development, we have raised our outlook for the total market for heavy-duty trucks in North America to 260,000 trucks,” Volvo said in its quarterly report.
Worldwide, Volvo delivered a total of 47,845 trucks in the first quarter of the year, which was 25% more than in the first quarter of 2013 but 22% fewer than in the fourth quarter of 2013.
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