Daimler Quarterly Profit Falls for First Time Since 2009 image

Recently, Daimler AG reported a third quarter net income diminished with 16 percent compared to last year’s Q3, reaching €1.36 billion in 2011 from €1.61 billion in 2010. Also, EBIT registered a 19 percent fell to €1.97 billion in 2011 from €2.42 billion previous year.

This despites the fact that the German carmaker registered an increase in the vehicle sales, which were with 11 percent higher than last year for a total of 525,000 units sold. Thus revenue was up with 5% versus last year, reaching €26.4 billion.

The net profit was significantly affected by several burdens, like €130 million charges from the impairment of Daimler’s investments in Renault and Kamaz, €130 million in higher foreign exchange costs and €100 million more for increased material costs .

At the end of September 2011, Daimler counted 269,887 employees worldwide, from which about 63 percent (167,948 persons) were located in Germany

The divisions’ third quarter main indicators (sales, revenues, EBIT’s) registered better values than same period during last year:
• Mercedes-Benz Cars continued its positive development: sales increased with 5 percent versus last year, at 337,200 vehicles; revenue was € 13,8 billion, higher than last year with € 1 billion; EBIT was €1,11 billion, versus €1,30 billion in Q3 2010
• Daimler Trucks also continued a successful development: sales increased with 22 percent versus last year, at 115,600 units; revenue grew at € 7.6 billion, versus € 6.4 billion in 2010; EBIT was €555 million, versus €496 million in Q3 2010
• Mercedes-Benz Vans: sales rose with 18 percent versus last year, at 63,500 units; revenue was € 2.2 billion, higher than last year with € 300 million; EBIT was €200 million, versus €122 million in Q3 2010
• Daimler Buses: sales were up with 1 percent versus last year, at 9,200 units; revenue was € 1,04 million, higher than last year’s €1,007 million; EBIT was €25 million, versus €11 million in Q3 2010
• Daimler Financial Services registered an EBIT of €337 million in the third quarter of 2011, versus €317 million in the prior-year period.

Daimler CEO Dieter Zetsche stated: “Daimler operated very successfully also in the third quarter. All divisions developed as we expected. (…)Our company is extremely well positioned in this jubilee year and has a very sound balance sheet. All the divisions are pursuing their goals very consistently and are right on track. At the same time, we are more flexible than ever before, so that we can react quickly to future developments”.

Based on the current data, Daimler AG forecasts positive results for the fourth quarter, superior to those registered in 2010. Seems like the company is on the right path to reach its targeted profitability rates for 2013. The company is aiming certain return on sales values for 2013, like 10% for Mercedes-Benz Cars, 8% for Daimler Trucks, 9% for Mercedes-Benz Vans and 6% for Daimler Buses.