Daimler AG posted better than expected results for the most recent quarter.
With an influx of cash from the sale of its sales in an aerospace company, Daimler AG was able to post generally solid earnings for the second quarter even though profit margins in key segments slipped.
The earnings posted by Daimler AG for the second quarter of 2013 were significantly higher than in the second quarter of last year and better than the market expected. Daimler’s Group EBIT for the period of April through June amounted to €5,242 million (Q2 2012: €2,268 million).
However, the German company’s earnings for the second quarter were boosted by a one-time gain totaling €3.2 billion related to the remeasurement and to the sale of the remaining shares in EADS, the pan-European aerospace company that makes Airbus passenger jets.
Earnings per share amounted to €2.65 but adjusted for the EADS effect, earnings per share were €1.25.
“As we previously announced, our earnings in the second quarter improved significantly compared with the first three months of the year and exceeded market expectations,” said Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars. “This represents progress in our earnings development, but no cause for complacency. We will continue to work hard on achieving our goals.”
Zetsche also said the sales growth of Mercedes-Benz in the second quarter was not fully reflected in earnings, primarily due to the changed product mix. And Daimler Trucks’ earnings were reduced by ongoing weak demand, especially in Asia and Western Europe. Mercedes-Benz Vans and Daimler Buses improved their earnings in the second quarter of 2013, while Daimler Financial Services’ EBIT also decreased.
Mercedes-Benz set a record for passenger-car sales in the second quarter of 2013. Mercedes-Benz car sales increased by 9% to 404,700 units and second-quarter revenue increased by 6% to €16.3 billion. The division achieved EBIT of €1,041 million, which is below the prior-year level of €1,337 million and a return on sales of 6.4%, compared to 8.7% in the same period a year ago.
“We presented the new S-Class in May, which met with an excellent response, and our compact-car offensive is also continuing very successfully,” Zetsche said. “The completely upgraded range of Mercedes-Benz trucks in Europe – the first to be fully available with Euro VI emission technology – has also been very well received by the customers.
“As a result of our new products, the increasing impact of the efficiency programs running in all business units and the further development of the markets that are especially important for us, we can assume that our earnings in the second half of 2013 will be significantly better than in the first six months of the year.”
He added Daimler is also pursuing the “Mercedes-Benz 2020” offensive.
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Despite its advancing lifecycle, the smart brand sees good chances that the unique two-seater will perform well in the highly competitive micro-car segment in 2013, with unit sales similar to last year.
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Nevertheless, Mercedes-Benz Cars assumes that full-year EBIT will be below the prior-year level. Daimler Trucks and Mercedes-Benz Vans expect to post EBIT from the ongoing business in the magnitude of 2012, while Daimler Buses should improve on last year’s earnings.
In 2014 and the following years, Daimler anticipates an improvement in operating profit for all the automotive divisions and for the Group. A stable earnings development is expected for Daimler Financial Services.