Products like the new Mercedes-Benz Coupe helped push parent Daimler AG back into the black for the first quarter.
Daimler AG appears to be on its way to making good on CEO Dieter Zetsche’s promise to turn around the company’s fortunes this year – good news for the executive himself considering the sometimes harsh criticism he faced at the company’s annual meeting.
Preliminary figures for the first quarter of 2010 show croup revenues shot to $28 billion, reversing the slump that gripped the company last year when revenues fell by more than a third. Daimler’searnings before interest and taxes (EBIT) also turned around, moving $1.6 billion into the black, compared with the $1.9 billion loss the company posted during the first quarter of 2009.
Daimler only let out partial financial information on Monday. More is due out next week but the company’s recovery was paced by the Mercedes-Benz car division, which posted a $1.2 billion EBIT due to strong sales, an improving model mix and positive pricing, as well as a favorable overall cost position during the first quarter, Daimler’s abbreviated press release said.
In addition, Daimler said its other four divisions – Daimler Trucks, Mercedes-Benz vans, Daimler Buses and Daimler Financial Services – also were in the black, though there several negative special items at Daimler Trucks and Daimler Financial Services included in the divisional results.
The first-quarter results reflect, among other things, a gain from selling Daimler’s stake in the Indian carmaker, Tata Motors, along with the negative impact from Airbus parent EADS NV. The company suggestd the numbers for the one-time gain and the special loss “are at similar levels,” though it declined to provide specific figures.
The Tata sale, announced earlier this year, is believed to have netted around a 265 million Euro profit, however.
Daimler also announced it had reached a settlement with the United Auto Workers, which represents workers at three plants in North and South Carolina belong to the Daimler Truck Group after five weeks of negotiations with the UAW. All three contracts involved in the negotiations have been ratified, and yield numerous provisions that will enhance scheduling flexibility, improve efficiency and reduce operating costs.
“We view these agreements as a significant milestone in securing our U.S. production footprint,” stated Martin Daum, president and chief executive officer of Daimler Trucks North America.
Daimler’s good news follows last week’s raucous shareholder’s meeting where senior management, Zetsche in particular, came under sharp attack for a variety of reasons. One of the more controversial issues concerned the announcement, made earlier this month, that the German maker was entering an alliance with the French-Japanese Renault-Nissan Alliance. Zetsche has alled this new partnership critical to helping his company develop future powertrains, as well as the much-needed next generation of products for Daimler’s struggling Smart car division.
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