Daimler fourth quarter tempered by weaker Mercedes earnings as tariffs hit

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Daimler AG CEO Dieter Zetsche, CFO Bodo Uebber, Martin Daum, head of Daimler’s truck and bus division and Manfred Bischoff, Chairman of the Supervisory Board attend the company’s annual news conference in Stuttgart, Germany, February 6, 2019. REUTERS/Michael Dalder

STUTTGART (Reuters) – Daimler’s fourth-quarter operating profit fell 22 percent as trade wars and ballooning costs for developing electric and self-driving cars hit profits at Mercedes-Benz cars, the company said on Wednesday.

Daimler said the return on sales at Mercedes-Benz cars fell to 7.3 percent in the fourth quarter from 9.5 percent in the year-earlier period.

For 2019 Mercedes-Benz Cars expects to achieve a return on sales of between 6 percent and 8 percent and a return on sales of between 5 percent and 7 percent for Mercedes Vans, Daimler said.

“With our guidance for Mercedes-Benz Cars and Mercedes-Benz Vans we are below our long-term target margins. We cannot be satisfied with this. Our goal is to return to our target margin corridor of 8 percent to 10 percent by 2021,” Daimler Chief Executive Dieter Zetsche said in a statement.

For 2019 Daimler said it expects a slight growth in unit sales, revenue and EBIT.

Daimler’s earnings before interest and tax (EBIT) dropped to 2.67 billion euros ($3.04 billion) in the fourth quarter, below analysts’ expectations of 2.92 billion euros.

Mercedes-Benz passenger car sales rose 4 percent in the fourth quarter but increased tariffs on vehicles exported from the United States to China and delivery stoppages for individual diesel models hit demand and resulted in weaker prices.

Mercedes-Benz emerged as the biggest selling luxury brand last year with 2.31 million new vehicle registrations, followed by BMW brand’s 2.12 million and Audi which posted registrations of 1.81 million last year.

Reporting by Edward Taylor; editing by Thomas Seythal and Jan Harvey

Our Standards:The Thomson Reuters Trust Principles.

2019-02-06 08:34:44

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