Traton Group, the parent of Navistar International, raised its full-year earnings guidance Wednesday after reporting solid deliveries for the third quarter.
Munich-based Traton reported 15% higher sales in the first nine months at 249,500 vehicles compared to 217,000 in the first nine months of 2022. Improving supply chains helped increase production. Volvo Group and Paccar Inc. both reported solid Q3 results earlier. They are cautioning of a slowdown next year, especially in over-the-road tractor orders.
“We have seen very positive developments in our business in the third quarter of this year, which is making us more optimistic for 2023 as a whole,” Traton Group CEO Christian Levin said in a news release.
Revenue rose by 20% to 34.2 billion euros ($36.2 billion) compared to 28.5 billion euros in the first nine months of 2022. Adjusted operating results more than doubled to nearly 3 billion euros ($3.2 billion) with a return on sales rising 3.9 percentage points to 8.6%.
A richer product mix, higher prices and more services revenue all helped offset higher prices for energy, raw materials and components.
Traton raised its full-year adjusted operating return on sales to a range of 7.5-8.5% from its previous forecast of 7-8%. The Volkswagen AG-owned truck holding company includes Scania, MAN, Navistar and the Volkswagen Truck and Bus brand in Brazil.
Incoming orders fall and backlog moderates
Incoming orders for the nine months fell 26% to 189,600 from 256,200 a year earlier. The decline reflects a return to normal after two years of pandemic-fueled pent-up demand. Higher interest rates also made new truck financing more difficult.
Traton Financial Services is supporting customers, including a relaunch of new and used vehicle lending at Navistar.
Traton’s backlog, or book-to-build ratio, fell to a healthy 0.8% from an overheated 1.2%. That means finished vehicles are being delivered faster than new orders are replacing them.
Navistar is still restricting incoming orders even as it begins production of the Scania-based S13 integrated powertrain. It will be the company’s last internal combustion engine.
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