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Daimler Trucks Slashes Outlook: Why Cummins Inc. and PACCAR Inc. Need to Worry

By Neha Chamaria - May 31, 2016 at 6:47PM

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The world’s largest truck company turning bearish is terrible news for PACCAR Inc. and Cummins Inc.

Daimler's Freightliner is one of the largest truck brands in the world. Image source: Daimler.

This is bad news for investors in trucking companies PACCAR Inc. (PCAR 0.67%) and Cummins Inc. (CMI 0.30%). In a surprising move, automotive giant Daimler's (DDAI.F -0.64%) truck unit, Daimler Trucks, slashed its outlook some days ago, projecting its 2016 sales and operating profits to be "significantly" lower than 2015. Dr. Wolfgang Bernhard, head of the Daimler Trucks and Daimler Buses divisions, explained why:

The situation of global truck markets has been challenging for several months and has recently got worse. Especially in the NAFTA region, but also in the Middle East, demand is weaker than previously expected.

Daimler's warnings are hard to ignore as it is the world's largest truck manufacturer. In fact, going by Daimler's observations about some of the key global truck markets, it appears that immense pressure could be building up on PACCAR's and Cummins' top lines. Click the slideshow below to know more. 

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Stocks Mentioned

Cummins Inc. Stock Quote
Cummins Inc.
CMI
$194.11 (0.30%) $0.58
PACCAR Inc Stock Quote
PACCAR Inc
PCAR
$82.89 (0.67%) $0.55
Daimler AG Stock Quote
Daimler AG
DDAI.F
$57.88 (-0.64%) $0.37

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