Daimler Trucks internationally has cut its profit forecast for its trucks division due to slumping sales in the United States and Brazil, sparking analyst concerns over its ability to read the market.
Daimler Trucks has said it expected earnings before interest and taxes (EBIT) from continued operations and unit sales to fall significantly this year.
It had previously expected EBIT from ongoing operations to remain steady at 2015 levels and unit sales to fall slightly.
“Daimler has finally decided to change its unrealistic guidance for trucks, which has not done any good to improve credibility over the last few months,” Citibank analyst Michael Tyndall said in a note on Friday.
Daimler Trucks accounted for about a fifth of group EBIT and about a quarter of total sales last year.
The North American heavy-duty trucks segment has cooled after a plunge in oil prices and metals-related business put a damper on industrial activity and haulage volumes prompting rival like Volvo to warn investors about a downturn.
“Daimler’s warning will no doubt also revive unwelcome memories of past mistakes and credibility concerns,” Exane BNP analyst Stuart Pearson said.
“Unfortunately it is hard to deny that Daimler now has something of a track record of failing to read the cycle.”
Daimler also said it would step up job cuts at its trucks division in Brazil, which is expected to result in 100 million euros ($AUD 155 million) of extra costs for voluntary severance packages.
Goldman Sachs analysts said Daimler’s revised guidance “leaves room for a positive surprise should end markets improve”.
Daimler said neither the lower outlook for its trucks division nor an airbag recall would affect its forecast for a slight rise in 2016 group EBIT from last year.
