Daimler AG first-quarter profit slumped after a decline in deliveries combined with rising expenses on new models, as the carmaker gave scant fresh detail on a cost cutting plan announced earlier this year.
- “Achieving the financial targets for 2019 has not become easier since the first quarter,” Chief Executive Officer Dieter Zetsche said in a statement. “In order to fulfill them and our strategic return targets again at all the divisions, great efforts and the focused deployment of resources are essential this year and in the years to come.”
- Daimler in February vowed to prepare cost cuts to shore up falling profits. Since then, Mercedes-Benz deliveries through March have declined 5.6 per cent with the manufacturer reporting a 16 per cent drop in first-quarter earnings before interest and tax. It still expects group earnings before interest and tax to “rise slightly” this year.
- Profitability at the main Mercedes-Benz Cars unit fell to 6.1 per cent from 9 per cent from a year ago. Daimler reportedly considers cutting about 10,000 jobs through voluntary measures as part of 6 billion euros (US$6.7 billion) savings in cutbacks at the cars operations by 2021.
- Departing Chief Executive Officer Dieter Zetsche earlier flagged a weak first-quarter return on sales at the Mercedes-Benz Cars unit, squeezed by expenses for the GLE SUV model changeover and ramping up a joint Mexican factory with Nissan Motor Co.
- Investors will look beyond first-quarter woes and focus on CEO-designate Ola Kallenius taking over in May, Bloomberg Intelligence analyst Michael Dean said in a report. “We anticipate his new strategic plan will be unveiled this summer.”
- Daimler fell 1.3 per cent to 57.70 euros Thursday, valuing the world’s largest manufacturer of luxury cars and commercial vehicles at 61.7 billion euros. After a dismal 2018, the stock has gained 22 per cent since the beginning of the year, outpacing German rivals BMW AG and Volkswagen AG.
- Daimler First Quarter Ebit Meets Estimates
- Daimler inked a deal last month to fold its troubled Smart mini-car marque into a joint venture with its largest shareholder Zhejiang Geely Holding Group in China.
- Culling the current cooperation for Smart with Renault SA added to questions over the future of other projects with the French peer and its Japanese partner Nissan Motor Co., who remain bogged down by the arrest of Carlos Ghosn.