Daimler Targets 2012 Profit Above Analyst Expectations on Mercedes Record
Daimler AG (DAI) (DAI) forecast higher 2012 profit than analysts had predicted, propelled by record demand for Mercedes-Benz brand cars.
Earnings before interest and taxes this year will be “in the magnitude” of 2011’s 8.98 billion euros ($11.9 billion), the Stuttgart, Germany-based company today. That compares with an 8.17 billion-euro average estimate of 21 analysts.
“The outlook is above expectations,” lifted by Mercedes sales and stable prices, said Daniel Schwarz, a Commerzbank analyst in Frankfurt, who recommends buying the shares.
Chief Executive Officer Dieter Zetsche has vowed to retake the luxury-car lead from Bayerische Motoren Werke AG (BMW) after slipping last year to third behind Volkswagen AG (VOW3GY)’s Audi. Mercedes plans to introduce 10 new models by 2015, including compacts and the CLS Shooting Brake, a wagon-like variant of the $71,300 four-door coupe. Analysts had predicted a profit drop this year because of costs to bring the cars to market.
Daimler raised the 2011 dividend to 2.20 euros per share, higher than the previous year’s 1.85 euros, after net income for 2011 climbed 29 percent to 6.03 billion euros. Analysts had predicted a dividend of 2 euros.
The shares rose as much as 2.33 euros, or 5.2 percent, to 46.95 euros, the highest since Aug. 3, and were up 3.8 percent as of 12:17 p.m. in Frankfurt trading. The stock has gained 37 percent in 2012, valuing the company at 49.4 billion euros.
Fourth-quarter earnings before interest and taxes surged 39 percent to 2.18 billion euros from 1.56 billion euros a year ago, the company, which is also the world’s biggest maker of heavy-duty trucks, said. The figure compared with a 2.17 billion-euro average estimate. Revenue rose 10 percent to 29.1 billion euros.
Mercedes aims to beat last year’s record of 1.26 million deliveries, growing faster than a forecast pace of 4 percent for the global auto market, on demand for the revamped B-Class compact and a new A-Class hatchback.
The models are part of a line of five small cars that the brand is developing to win over younger customers. Mercedes also plans to double the variants of the S-Class flagship to six after a new version is introduced in 2013.
Mercedes’s cars division reported an Ebit margin of 8.2 percent in the fourth quarter, slipping from 8.3 percent a year earlier. The company is targeting a 10 percent margin from 2013. Daimler reiterated today that the brand aims to sell 1.5 million autos by 2014 and 1.6 million by 2015.
The Daimler (DAI) unit aims to overtake its closest rivals after falling behind last year. In the first nine months of 2011, Mercedes reported an Ebit margin of 9.4 percent, compared with 12.8 percent at BMW and 12.2 percent at Audi.
“A direct comparison with our competitors shows that some of them have already achieved what we still aim to attain,” Zetsche said at a press conference in Stuttgart. “When we fully exploit our potential, we will be permanently ahead of the competition, and that’s exactly what we aim to do.”
Mercedes will spend about 2 billion euros to expand production in China and is investing an additional $2.4 billion in its U.S. plant. The carmaker will also open a new 800 million-euro factory in Hungary this year in a bid to reclaim the top spot in luxury vehicles that it lost in 2005.
“For Daimler, 2012 will be a transition year because of their new small cars,” said Stefan Bauknecht, a fund manager in Frankfurt at Deutsche Bank AG’s DWS. Daimler’s “headwinds will turn to tailwinds in 2013, while BMW’s growth momentum slows” as the 5- and 7-Series sedans age, he said.
Fourth-quarter Ebit at the trucks division, which also makes Freightliner vehicles in the U.S. and Fuso models in Asia, rose 5 percent to 422 million euros, giving it a margin of 5.1 percent compared with 5.9 percent a year earlier.
The trucks unit, which expects sales to increase this year on growth in the U.S. and a recovery in Japan, is targeting an average return on sales of 8 percent across a business cycle starting in 2013.
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