By Amir Orusov and Ilona Wissenbach
(Reuters) -Daimler Truck, one of the world’s biggest truckmakers, told analysts on Wednesday that second-quarter orders in its Trucks North America segment will be roughly on par with the first quarter levels.
Late on Tuesday, the company cut its full-year operating profit and revenue forecast, reflecting lower expectations for its North American business on heightened demand uncertainty due to U.S. duties.
The effect of U.S. tariffs on first-quarter profitability was minor, chief financial officer Eva Scherer said on the call, adding the impact was mainly on demand.
Profitability is ensured for the North American segment in the second quarter though lower than in the first quarter, Scherer said. However, the order books for the second half of the year was not filled yet and the company needed a stronger order momentum, she added.
In April, Daimler (OTC:MBGAF)’s peer Traton said U.S. truckers were deferring orders over fears of a global recession, while Swedish Truck maker Volvo (OTC:VLVLY) cut its North America truck market outlook amid tariff-related uncertainty.
As for the U.S.-China trade deal slashing reciprocal tariffs, it is too early to predict but the deal may be positive for orders in the second quarter, Scherer said.
Commenting on the billion-euro cost-cutting programme launched in March, Scherer said the company booked a provision in the mid-three-digit million euros range in the second quarter.
The truckmaker has already received the necessary approval to reduce personnel-related costs and increase flexibility of the German locations, the company said in a press release.
As for the European market, Daimler Truck prioritizes profitability over the market share, the finance chief said, adding the company did not want to regain the lost market share in Europe through excessive incentives.