Daimler Truck Faces Uncertain Future

By Louis van Boxel-Woolf

(Reuters) – Daimler Truck warned of tough conditions ahead as it reported third-quarter earnings on Thursday. CFO Eva Scherer noted that instability resulting from the German government's collapse could worsen the situation.

"Our market share in Germany is about double the market share we have in the EU," Scherer stated, adding: "We see a lot of volatility and uncertainty that is not going to help; we would always want clarity and stability."

Daimler Truck, which also manufactures U.S. yellow school buses under the Thomas Built brand, posted slightly better-than-expected third-quarter core profit.

This was driven largely by performance in North America, where adjusted earnings before interest and taxes rose 2% to reach 725 million euros. However, core profit from its Europe-focused Mercedes-Benz business fell 47% to 283 million euros.

"We have been waiting for an economic recovery in Germany for a while now," Scherer said. "Unfortunately, there are no signs of an improving situation."

In response to questions about the U.S., where Donald Trump's presidency raises the prospect of tariffs on companies like Daimler Truck that manufacture in Mexico, Scherer said the firm could adapt its production strategy.

"We are able to produce every truck model and bus model in the U.S. and in Mexico," she mentioned. "There is no dependency on a particular product made in Mexico."

Daimler Truck's overall core profit was 1.19 billion euros for the quarter ending Sept. 30, surpassing the 1.14 billion euros forecast in a company-compiled poll. Shares in Daimler Truck, which confirmed its yearly guidance, saw an increase of 3.8% at 0758 GMT.

In July, the company had updated its annual outlook and announced in August a reduction of hours for some employees in Germany due to weak demand in Europe and Asia.