Daimler making profits again and is upbeat for 2011

16th February 2011, Comments 0 comments

German luxury car maker Daimler shot back to profit last year after massive 2009 losses, and on Wednesday gave an upbeat outlook for 2011.

Daimler, which owns the Mercedes-Benz brand and is the world's leading maker of heavy trucks, made a net profit of 4.7 billion euros ($6.3 billion) in 2010, more than reversing its 2009 loss of 2.6 billion euros.

The group turned a 2009 fourth quarter loss of 352 million euros into a 1.1 billion euro profit in the last three months of 2010 and will propose a dividend of 1.85 euros per share, a statement said.

Daimler did not pay a dividend in 2009.

Investors were not convinced by the group's upbeat tone however, sending its shares plummeting in afternoon Frankfurt trading, although profit-taking might explain some of the sell-off.

"Daimler managed an excellent comeback last year," chairman Dieter Zetsche said in the statement.

Daimler also benefitted last year from special items that included the sale of a stake in Tata Motors of India which added 265 million euros to the bottom line.

Daimler took a charge of 237 million euros in connection with the stumbling Airbus A440M military transport plane, meanwhile, owing to the automaker's stake in Airbus' parent company EADS.

The German car maker said earnings before interest and taxes (Ebit), or core earnings, soared to 7.27 billion euros from a loss of 1.5 billion euros a year earlier.

That was better than its own forecast of 7.0 billion euros but undershot analysts expectations for 7.7 billion euros, Dow Jones Newswires reported.

"The goal for 2011 is an Ebit clearly superior to that of 2010," Zetsche told a press conference in Stuttgart, southern Germany.

Daimler also expects an increase in sales, though it did not give a detailed figure.

The group was boosted by a recovery of all its major markets last year, and sold 1.9 million vehicles.

Group revenue gained 24 percent to 97.8 billion euros, thanks notably to rising Mercedes deliveries in China and the United States.

Daimler said Tuesday that it will take over the US distribution of its Smart city cars from the Penske group, which Zetsche said has "done good work."

"We want to position ourselves better" however, he added.

The brand has sold 45,000 units in the US in three years, and Daimler will launch a new five-door version there that it is developing in a collaboration with Renault and Nissan.

Finally, Zetsche hailed the arrival of Christine Hohmann-Dennhardt to the Daimler board, where she will be in charge of questions of compliance.

The Daimler chairman said her nomination should be seen as "a clear signal in favour of diversity" as Germany debates whether to establish quotas for women in senior managment positions.

Shares in the group were sharply lower in afternoon trading on the Frankfurt stock exchange, showing a loss of 2.84 percent to 54.39 euros, while the DAX index of German blue-chips was 0.14 percent higher overall.

Auto analyst Frank Schwope at NordLB bank said "the market might have been a little disappointed by the fourth quarter" results.

"It might also be the result of profit-taking because the share has gained a lot of ground recently," he added.

© 2011 AFP

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