Daimler Profits Dive And Worse To Come.
Company Splits Into 3; Cars, Trucks And Mobility.
Daimler hit investors with a 30 per cent drop in profits and then shocked them with a forecast that profits for the year are under threat from currency problems, tariff obstacles in China and new E.U. fuel economy regulations.
In the second quarter Daimler earnings before interest and taxes (EBIT) fell 30 per cent to €2.64 billion. Mercedes-Benz’ profit margin narrowed to 8.4 per cent in the quarter from 10 per cent in the year earlier period.
Investment researcher Evercore ISI said the second half will be hit by significant raw material and foreign exchange headwinds, with vehicle certification in Europe slowed as Mercedes complies with the E.U.’s real world fuel consumption rules.
Meanwhile Daimler unveiled a new corporate structure splitting into three legally separate entities – Mercedes-Benz AG, Daimler Truck AG, and Daimler Mobility AG, all reporting to Daimler AG.