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July 23, 2021 3:45 PM, EDT

Daimler Posts Q2 Earnings, Revenue Surge Despite Headwinds

Daimler trucks and busesDaimler

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Daimler AG reported higher earnings and revenue as it sold 736,385 passenger cars and commercial vehicles in the second quarter, up 36% compared with 541,833 a year earlier. Truck sales alone jumped by an even higher percentage.

Stuttgart, Germany-based Daimler, which reports in euros, posted profits the equivalent of $4.3 billion, or $3.95 per share, compared with a loss of $2.2 billion, loss of $2.20, a year earlier.



Revenue for the quarter ended June 30 climbed 44% to $51 billion compared with $3 billion in the 2020 period.

“The results that you have seen here are strong, and compared to what we have delivered historically very strong. And this is in spite of fighting a challenge like the semiconductor issue,” CEO Ola Kallenius said during an earnings call.

Global truck sales, its second-largest segment, increased 94% to 112,139 compared with 57,945 a year earlier.

Daimler expects Daimler Trucks & Buses’ full-year adjusted return on sales to be 6% to 8%, previously 6% to 7%.

Martin Daum, the unit’s CEO, said his team “battled for every single truck” amid supply shortages. “Demand is still very strong, and our backlog is stable on an exceptionally high level.”

He added: “We are determined to lead the transformation to zero emission in our industry, stay tuned.”

In related news, demand for gasoline and diesel to fuel cars and trucks will peak in 2027, which is four years earlier than expected, as more fuel-efficient autos and increasing adoption of electric vehicles curb global consumption, according to BloombergNEF.

Decline in demand for road fuel will be steepest in Europe and the United States and an anticipated rise in fuel use in countries such as India and China will fail to materialize, Bloomberg’s energy data and analysis firm said in a July report.

Daimler once again reported the listing of Daimler Truck as its own separate company on the Frankfurt Stock Exchange is on track and expected to be completed before year-end 2021, referring to it as a historic strategic step. The project is currently in the preparatory and auditing phase, and will need shareholder approval, with that vote scheduled for a meeting this autumn.

Freightliner Photo Gallery

Cascadia

A Class 8 Freightliner Cascadia with SAE Level 2 automation. (Daimler AG)

Meanwhile, the company expects the shortage in semiconductors will “remain an issue” and continue throughout 2022, but will improve then compared with the shortages this year.

Daimler said the shortages had limited impact on its truck and bus production, but uncertainty remains for the second half this year.

At the same time, the company forecast significant increases in demand for trucks in North America, the 30 European Union countries and Brazil while demand in Japan will remain flat compared with a year earlier.

Also, in the second half, Daimler sees headwinds in terms of higher prices for materials such as steel, aluminum, copper, palladium and rhodium.

“The headwinds we now see moving forward are stronger than what we assumed so far,” Kallenius said. “We said at the beginning of the year, we could probably have on the full year 0.5% in terms of cost headwind. Now you could hear us saying 1% in the second half. And actually, we can see that all in all, in cars and vans, as well as in trucks and buses.”

Daimler Mobility, its business segment focused on financial and mobility solutions, reported new business increased by 23% to $20.2 billion in the second quarter compared with $16.4 billion a year earlier, driven by strong sales developments at the industrial business.

The segment ranges from rental, leasing and financing services, fleet management and insurance to app-based mobility solutions such as car sharing or ride-hailing.

The company expects the segment’s full-year adjusted return on equity to be 17% to 19%; previously it was 14% to 15%.

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