Daimler Truck isexpecting a slight decline in the heavy-duty truck market in North America and Europe in 2024, with inflationary pressures continuing to have an impact.

According to Reuters, shares in Daimler Truck were down 3.8% despite the German truck and bus maker reporting higher third quarter earnings.

A combination of the spin-off costs and high inflation meant conditions were “extremely challenging” and as a result prices would remain high, Daimler Truck’s acting finance head Claus Baessler said following the results.

Although incoming orders had fallen this year, Daimler Truck’s order book for the first half of 2024 was strong and “significant supplier constraints”, which hampered sales were one-offs, chief executive Martin Daum said.

Daum said the issue was primarily limited to one supplier in North America, which he did not name.

Daimler Truck reported a 9.8% adjusted return on sales for its industrial business in the third quarter compared to 9.4% last year, even as supplier bottlenecks dented its unit sales.

The company confirmed its 2023 forecast, and said it expected record earnings, with adjusted earnings up 34% so far.

It raised its profit and revenue guidance in July as supply chain constraints eased and demand in its core markets and the after-sales business grew.

But incoming orders were down by 27% between July and September, Daimler Truck said, bringing the total drop in incoming orders this year so far to 17%.

Higher earnings in Europe and Asia, despite drops in unit sales in both regions, indicated higher prices and cost cuts compensated for the fall in deliveries.

Adjusted earnings were up 13% in Europe despite a 5% drop in unit sales, and up 3% in Asia despite an 8% sales drop.

In North America, Daimler Truck’s largest market, adjusted earnings were down 4% on lower sales, but the segment was still within its annual target for a return on sales of 11% to 13%.