Company Claims Model Changeover Expenses Hurt Performance
Daimler’s third quarter profit dipped a bit as it spent more money on launching new versions of the Mercedes B, C and M class, but investors were still impressed by the company’s performance and don’t seem too worried yet about what might happen in 2012.
Daimler’s EBIT slipped 19 per cent to €1.97 billion in the quarter from €2.42 billion in the same period of 2010. The profit margin fell to eight per cent from 10 per cent in the first half and compared with BMW and Audi’s double digit performances recently.
The company wants investors to think its performance was hampered by extraordinary events.
“Daimler would like to portray 2011 as a transitional year in many respects. We thing the third quarter bears this out to some extent, but other peers – notably BMW – are also facing quite similar product changeover headwinds,” said Citigroup Global Markets analyst John Lawson.
BMW is currently in the middle of refreshing its 1 series and about to relaunch its biggest seller, the 3 series.
Stronger
Bernstein Research analyst Max Warburton said things next year may be tough for the industry in Europe, but Mercedes is in a stronger position than most.
“2012 looks like it’s going to be a tough year, but Daimler may well fare better than many fear,” Warburton said.
Daimler wouldn’t be drawn on its prospects for 2012, but reiterated its forecast for 2011 of a very significant rise in EBIT compared with last year’s €7.27 billion.
Neil Winton – November 3, 2011
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