Traton Financial Services’ revenue rose in the third quarter of 2023 as the company expanded its truck and bus portfolio and interest income increased.
Traton Financial Services, the financing arm of truck and bus manufacturerTraton, posted 3Q sales revenue of $443.2 million, up 29.9% year over year, according to the company’s earnings presentation. Revenue for the first nine months of 2023 landed at $1.2 billion, up 24.1% YoY, according to the earnings report.
“Traton Financial Services recorded a double-digit percentage growth on the back of an expansion of its portfolio and increased interest income,” Michael Jackstein, chief financial officer for Traton, said during the company’s earnings call Wednesday. “Higher funding costs and lower spreads had a counteracting effect on profitability.”
Traton Financial Services relaunched Navistar Financial Services’ retail business in October, according to the presentation. Traton merged with Navistar in July 2021, and the relaunched Navistar Financial Services is key to Traton’s U.S. market strategy, Traton Chief Executive Christian Levin said on the call.
“Our captive financial services business has now rolled out in the U.S., and we are aiming for Canada,” he said. “This Navistar Financial Services retail business is a great complement to growing our overall service business in the American market, where we see so much potential.”
With the relaunch of Navistar Financial Services and growth in Traton Financial Services’ portfolio, Traton maintained its outlook for financial services revenue at a 10% to 20% increase for the full year 2023 compared with 2022, according to the presentation.
Global quarterly vehicle sales up 2% YoY
Traton reported global vehicle sales increased 1.9% YoY in Q3, landing at 81,631 units. Global truck sales were 67,235 units, up 1% YoY, while bus sales ticked down 1.8% YoY to 7,654 units, and van sales tallied 6,472 units, up 18.7% YoY.
North American truck sales for the first nine months of 2023 totaled 59,873 units, up 18.7% YoY, bringing Traton’s overall truck sales to 207,078, up 14% YoY, according to the earnings report.
The company increased unit sales “despite a still challenging market environment but also challenges in the supply chain,” Levin said. “We see a further stabilization, but we have disruptions, especially in the United States, where the supply market is extremely stretched. We continue to experience regular bottlenecks.”
Traton North American bus sales were 11,785 for the first nine months, up 16.9% YoY, according to the earnings report. Traton’s global bus sales reached 22,502 during the same period, up 8.8% YoY.
North American truck orders down
Total Traton vehicle orders in Q3 declined 30% YoY to 64,353 units, according to the presentation. Global truck orders landed at 51,744 units, down 30.8% YoY, while bus sales clocked in at 7,093 units, down 28% YoY, and van sales landed at 5,516 units, up 29.6% YoY.
Traton North American truck orders totaled 31,688 in the first nine months, down 49% YoY, according to the earnings report. Traton’s total truck orders decreased 28.7% YoY to 149,990 in nine months, although the company’s backlog remains elevated, Levin said.
“We still, in most of our brands, experience a six-month waiting time for customers, meaning that we’re well into 2024, and in some cases, all the way up to next summer for new orders,” he said.
Traton North American bus orders totaled 10,036 during the first nine months, down 20.3% YoY, while global Traton bus orders dropped 17.5% YoY to 21,095, according to the report.
Shares of Traton SE [OTCPK:TRATF] were trading at $19.67 at market close today, down 2.62% or 53 cents from market open. TRATON has a market capitalization of $9.38 billion.