Already a Bloomberg.com user?
Sign in with the same account.
April 27 (Bloomberg) -- Daimler AG (DAI) reported an unexpected increase in first-quarter profit as record deliveries of Mercedes-Benz cars helped offset higher spending for model introductions and a new factory.
Earnings before interest and taxes gained 4.9 percent to 2.13 billion euros ($2.81 billion) from 2.03 billion euros a year ago, the Stuttgart, Germany-based company said today. Profit beat the 1.94 billion-euro average estimate of eight analysts surveyed by Bloomberg. Sales rose 9.2 percent to 27 billion euros.
Chief Executive Officer Dieter Zetsche reiterated full-year goals of increasing sales and matching last year’s 9 billion- euro operating profit. The Mercedes-Benz auto unit’s first- quarter profit slipped 2.8 percent to 1.25 billion euros on costs for a plant in Hungary and new small cars. Volkswagen AG (VOW)’s Audi, which last year surpassed Mercedes-Benz as the world’s second-largest maker of luxury cars, yesterday reported that earnings climbed 27 percent to 1.41 billion euros.
Daimler’s profit is “slightly better than expected but more or less in line,” said Albrecht Denninghoff, a Sylvia Quandt Research analyst in Frankfurt who has a “buy” rating on the shares. “These results are not the great game-changer to convince skeptics.”
Daimler dropped as much as 1.46 euros, or 3.4 percent, to 41.21 euros and was down 1.6 percent to 41.97 euros as of 9:41 a.m. in Frankfurt trading. The stock has gained 24 percent this year, valuing the German company at 44.7 billion euros.
Mercedes-Benz Cars has a goal of raising the operating margin to at least 10 percent of sales next year from 9 percent last year. The division’s first-quarter return on sales slipped to 8.4 percent from 9.3 percent a year earlier. Zetsche, who also leads the Mercedes-Benz Cars division, has repeatedly called 2012 a year of transition for reaching 2013 profitability targets.
By the end of the decade, Daimler wants to recapture its leading position among the luxury-car makers, pursuing the same goal as Volkswagen AG’s Audi brand. Bayerische Motoren Werke AG (BMW), which overtook Mercedes-Benz in global luxury-vehicle sales in 2005, will release quarterly earnings on May 3.
Mercedes-Benz is spending to build and introduce 10 completely new models on the market by 2015 to rejuvenate the brand, including converting the A-Class compact into a sportier car. The brand has a target by that year of delivering 1.6 million vehicles, a figure BMW surpassed in 2011 with its namesake marque and British subsidiary Mini combined.
First-quarter deliveries by the Mercedes-Benz brand rose 12 percent to a record 313,902 cars and sport-utility vehicles. The unit is targeting growth of more than 4 percent for 2012 for a second consecutive annual record.
Daimler first-quarter net income gained 20 percent to 1.42 billion euros from 1.18 billion a year earlier.
“I do not understand the negative market reaction,” said Juergen Pieper, a Bankhaus Metzler analyst in Frankfurt with a “buy” rating on the shares. “In my view, the figures were quite good.”
The Daimler Trucks division, which includes the Mercedes- Benz, Freightliner, Western Star and Fuso commercial-vehicle brands, posted a 20 percent jump in sales to 107,000 vehicles in the quarter as demand in North America more than made up for declines in Europe and Latin America.
The German company is forecasting that its truck sales in 2012 will exceed last year’s 425,756 vehicles. A new Indian brand, BharatBenz, inaugurated its first plant in the city of Chennai this month. Daimler is also planning to start truck production in China later this year with joint-venture partner Beiqi Foton Motor Co. (600166)
Daimler opened a 800 million-euro Mercedes-Benz car factory in late March in Kecskemet, Hungary, where it’s making the van- like B-Class model. Workers at the site, Daimler’s first new assembly plant in 15 years, earn one-fifth of their counterparts’ pay at Rastatt, Germany, the other location where Mercedes makes the B-Class.
The German manufacturer said April 25 that it will close its Orion municipal-bus business in North America as part of a reorganization of coach operations in the region. Daimler will buy a minority stake in closely held Motor Coach Industries International Inc., which will become the U.S. and Canadian distributor of Setra models that Daimler makes in Germany.
Daimler will spend as much as 110 million euros on the repositioning of the bus unit, the company said today.
To contact the reporter on this story: Dorothee Tschampa in Frankfurt at email@example.com
To contact the editor responsible for this story: Chad Thomas at firstname.lastname@example.org