Daimler third quarter profits slipped in the third quarter as revenue rose 8% to EUR28.6bn. Group EBIT was EUR1,921m versus Q3 2011’s EUR1,968m and net profit was EUR1,205m (EUR1,360m), leading to lower earnings per share of EUR1.03 compared with EUR1.21).
“Considering the significantly more difficult market conditions, Daimler achieved good earnings in the third quarter,” said management board chairman Dieter Zetsche.
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“Due to the economic challenges, Daimler will not match the high prior-year EBIT in full-year 2012, but will still post good earnings once again,” he added.
On its ambitious targets, he said: “But we are not yet at the level that we aim to reach in the medium to long term. We have therefore initiated appropriate measures for all divisions and are thus prepared for a difficult market environment.
“At Mercedes-Benz Cars, we are adding an important element to our Mercedes-Benz 2020 growth strategy: ‘Fit for Leadership.’ With this programme, we are combining existing and additional efficiency measures in order to secure our short-term targets and to give our business system an optimal and sustainable positioning.”
Further increases in unit sales at Mercedes-Benz Cars and Daimler Trucks were achieved despite more difficult conditions in some markets though the vans and buses units both booked lower unit sales.
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By GlobalDataDaimler said group EBIT was reduced by higher expenses in connection with the expansion of car and heavy truck model lines.
Financial services profits slipped due to increased cost of risk though exchange rate effects boosted earnings.
In the third quarter, Daimler sold 528,600 cars and commercial vehicles worldwide, up just 1% year on year. Adjusted for currency changes revenue rose only 3%.
Nonetheless, Mercedes-Benz Cars’ third quarter tally of 345,000, up 2%, set a record though the unit’s EBIT fell to EUR975m from EUR1,108m. The division’s return on sales was 6.4% versus 8%.
Growth in unit sales, especially in the United States, had a positive impact on earnings, Daimler noted.
“High growth rates were achieved in particular with SUVs. Better pricing also helped the division to achieve increased earnings. In addition, exchange-rate effects had a positive effect on earnings.”
Truck unit sales rose 3% to 119,100, revenue was up 6% to EUR8.1bn but, again, EBIT of EUR507m and a return on sales of 6.3% was lower than Q3 2011’s EUR555m and 7.3%.
Daimler now expects its total unit sales for 2012 to be “higher” than last year’s 2.1m.
“On the (cars) earnings side, charges are anticipated from measures taken to support the dealer network in China,” the automaker said.
“Following substantial growth in the year 2011, Daimler assumes that the Daimler Group’s revenue will continue to grow in 2012 and will be significantly higher than EUR110bn. The biggest increases will come from the [cars] and [trucks] divisions.
“The key driver of this revenue growth is the higher volume of unit sales, especially in the NAFTA region.”
However, Daimler said it had adjusted its earnings forecasts “in view of the significant worsening of the market environment in major markets in recent months and the more intense competition”.
It now expects group EBIT of about EUR8bn for the full year.
