Daimler today put the most positive spin it could on its second quarter results, avoiding initially mentioning a horrendous year on year comparison by saying the second three months of the year turned out better than the first.
Using its chosen measure of earnings before interest and tax (EBIT), the automaker reported a loss of EUR1.005bn compared with a Q2 2008 profit of EUR2.053bn.
The Q2 result was, however, better than the EUR1,426m loss booked in the first three months.
Daimler said it had booked special charges of EUR604m, as it dumped its remaining 19.9% stake in Chrysler, plus EUR401m for the struggling trucks unit hard-hit by the global financial crisis as hauliers put off equipment replacement.
As at PSA, cash flow improved as vehicle stocks were reduced – 44% in the case of Mercedes-Benz cars.
Daimler said it expected operating profitability to improve gradually in the rest of the year.
“A comparison with the very good second quarter of last year shows that there is still a lot of work to be done,”chairman Dieter Zetsche said.
Daimler blamed the Q2 earnings fall mainly on lower vehicle unit sales and also cited restructuring costs at the Mitsubishi and Daimler trucks North America units and a reduced contribution from the financial services operations.
A Chrysler pension agreement cost it EUR387m and there was a EUR373m relating to the equity interest.
Net loss was EUR1.062bn compared with net profit of EUR1.395bn in Q2 2008. The loss per share was EUR0.99 versus EUR1.40 profit.
Unit sales were down 31% to 391,500 with revenue off 27% to EUR19.6bn.
Mercedes-Benz Cars sold 287,200 vehicles in the second quarter compared with 354,000 the year before. This was a 24% quarterly gain thanks mainly to the launch of redesigned E-class. Revenue was off 18% to EUR10.6bn.
Daimler Trucks’ second-quarter unit sales fell 56% to 54,100 units with revenue down from EUR7.4bn to EUR4.2bn.
Financial services booked Q2 EBIT of EUR79m, down from EUR183m in 2008, citing mainly higher expenses for credit risks.
Daimler said it expected unit sales to “decrease significantly” in full year 2009 (2.1m were sold in 2008) but anticipated “a revival of business in the second half of the year” as its new models, especially the redesigned flagship S-class, become more widely available.
Smart is also heading into new growth markets such as China and Brazil.
The automaker also expects to achieve an operating profit in the second half of the year.
“The mood is far too positive,” Bankhaus Metzler analyst Juergen Pieper told Reuters. “While the results are better than expected, with these figures Daimler is among the weakest of Europe’s car makers. Particularly the outlook is not very convincing.”
equinet‘s Tim Schuldt was more positive: “At first glance, the numbers look good. Particularly the most important number, the EBIT from continuing operations, was significantly above expectations. The very good cash flow was a positive surprise as well.”