| Daimler reports Q4 net loss of $482 million |
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18/02/2010 14:46 (723 Day 13:33 minutes ago) | |||||
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The FINANCIAL -- Daimler, the maker of Mercedes cars and Freightliner trucks, reported Q4 net loss of $482 million on February 18 and said it intends to cancel the annual dividend.
Daimler reported a net loss of 352 million euros, or $480 million, compared to a loss of 1.26 billion euros a year earlier. The company blamed costs associated with dialing down factory production last year, as well as overall slow sales, The New York Times reports. The average forecast of analysts surveyed by Reuters was for a fourth-quarter profit of 264 million euros.
Operating profit in the quarter ended in December was 600 million euros, however, a significant improvement over the loss of 1.95 billion euros in the year-earlier period, after the global financial crisis had devastated the market for luxury cars, according to the same source. Daimler, the second-largest automaker in Germany after Volkswagen, said there would be no dividend for 2009, after paying 60 cents a share for 2008. It was the first time the company had canceled dividends in 14 years, according to Reuters.
The manufacturer, which is also the world’s largest truckmaker, said it expects to increase vehicle sales in 2010 and will have earnings before interest and taxes of more than 2.3 billion euros this year, Bloomberg reports.
Daimler expects to boost group vehicle sales this year amid a 3-4 percent overall gain in global car demand and moderate growth in truck markets, according to Reuters. "Following a significant (20 percent) decrease in 2009,the Daimler Group assumes that its revenue will rise again this year, but will still be significantly lower than in 2008," when turnover reached 98.5 billion euros, the company said.
Daimler shares sank more than 8 percent to their lowest point since September 2009 before paring losses slightly, not helped by the scrapping of a dividend, when analysts' median forecast had banked on 0.50 euro a share, according to the same source. Daimler Chief Executive Dieter Zetsche, whose contract was extended on Wednesday, may have retained the confidence of his board but he still has to put out a number of fires before he can focus on developing a coherent strategy for the longer term. Together with the new head of production at Mercedes, Wolfgang Bernhard, the Daimler duo will look to slash billions more in costs as they aim to lift the premium car division's operating margin to 10 percent.
Despite the glum outlook, the company reported positive revenue gains in all divisions in the fourth quarter: Mercedes-Benz Cars, which includes the luxury brands Mercedes-Benz and Maybach, as well as the compact Smart brand, AP reports. Trucks, vans and buses also reported gains in revenue. Daimler is the world's largest truckmaker with brands including Mercedes-Benz, Freightliner, and Mitsubishi-Fuso.
Daimler, based in Stuttgart, is the first of the big German automakers to report fourth-quarter earnings for 2009. BMW’s chief financial officer Friedrich Eichiner said last week that the carmaker, based in Munich, will report a profit for the fourth quarter, without giving specific figures, according to The New York Times. Daimler struggled more than the other German carmakers during the downturn because, unlike BMW, it has a large truck division which is highly sensitive to economic cycles. Daimler also waited longer than BMW to fire temporary workers and take other measures to cut costs.
In addition, unlike Volkswagen, Daimler did not benefit greatly from cash-for-clunker schemes in Germany and other European countries that chiefly boosted sales of lower-priced cars, the same source reports.
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