Investing.com -- Shares of Daimler Truck (ETR:DTGGe) traded higher on Friday following fourth-quarter results that came in ahead of expectations and a full-year outlook that topped market forecasts.
The Germany-based truck and bus manufacturer reported an increase in revenue and stronger-than-anticipated earnings before interest and taxes, with its North American and European businesses driving performance.
Daimler Truck posted fourth-quarter sales of €14.3 billion, surpassing consensus estimates by 2%, though down 4% year-over-year.
Adjusted EBIT for the industrial business came in 9% higher than expectations at €1.07 billion, with the broader group exceeding forecasts by 1% at €1.1 billion.
North America, a key market for the company, delivered an operating profit of €737 million, an increase of 10% compared to projections, while the Mercedes-Benz (OTC:MBGAF) segment saw a 45% outperformance at €430 million. Asia and the bus division recorded lower results, falling short by 7% and 5%, respectively.
Order intake for the quarter rose 15% year-over-year to 124,000 units, with particularly strong demand for Mercedes-Benz models, which saw orders climb 76% to 37,000 units.
However, orders in North America declined 14% to 50,000 units, while bus orders were down 10% to 7,700 units.
Total deliveries for the quarter stood at 124,386 units, marking an 11% decline year-over-year. By segment, North America recorded deliveries of 5,967 units, flat compared to the previous year. Mercedes-Benz deliveries fell 7% to 5,289 units, while Asia and the bus segment saw an 8% increase and a 12% decline, respectively.
Daimler Truck also outlined its guidance for 2025, projecting EBIT growth of 5% to 15%, with a midpoint estimate of €5.1 billion, which is approximately 2% higher than consensus expectations.
Free cash flow guidance for 2025 was set at €2.4 billion to €2.8 billion, representing a decline of 10% to 25%, but following a stronger-than-expected 2024 performance.
The company expects the North American market to reach 280,000 to 320,000 units in 2025, a 3% decline at the midpoint compared to 2024, while the European market is projected to fall by 8%.
The company confirmed a €1 billion cost-cutting plan for 2030, currently under discussion with the works council.
Among challenges for the coming year, the company cited potential impacts from trade tariffs and regulatory changes in North America, particularly related to emissions standards. However, Jefferies estimates that a North American truck market of 280,000 units remains achievable even if certain emissions rules are repealed.
Daimler Truck, which was spun off from its former parent Daimler AG (ETR:MBGn) in December 2021, has positioned itself as a leader in the global commercial vehicle sector.
The company sells between 400,000 and 500,000 vehicles annually and holds a dominant market share in North America while maintaining a strong presence in South America and Europe. Revenue for the full year of 2024 was approximately €51 billion, with an adjusted EBIT margin of 7.8%.
Jefferies maintains a bullish outlook on Daimler Truck, with a price target of €50 per share, reflecting a potential 28% upside.
The brokerage cited the company’s strong North American business, improving operational efficiencies, and steady demand for its vehicles as key drivers for future performance.