Daimler Earnings Double on Mercedes Margins, EADS Gain
Daimler AG (DAI) posted second-quarter profit that beat estimates as profitability improved at the Mercedes-Benz luxury-car unit and gains from selling its stake in the owner of planemaker Airbus SAS (EAD) exceeded its forecast.
Earnings before interest and taxes more than doubled to 5.2 billion euros ($6.8 billion) from 2.24 billion euros reported a year earlier, Stuttgart, Germany-based Daimler said today in a statement. Profit topped the 3.31 billion euros average of six analyst estimates compiled by Bloomberg. Daimler shares jumped to the highest in almost two years.
Chief Executive Officer Dieter Zetsche, who also leads the Mercedes-Benz Cars division, sold Daimler’s holding in European Aeronautic, Defence & Space Co. in April to focus on the auto business. The gain from the disposal was 3.2 billion euros, Daimler said today, 19 percent more than it had previously estimated. Earnings as a proportion of sales at Mercedes amounted to 6.4 percent versus 3.3 percent in the first quarter.
“The numbers are very, very strong,” Sascha Gommel, a Frankfurt-based analyst at Commerzbank AG, said by phone. Profitability at Mercedes “is significantly better than expected, thanks obviously to the model cycle.” Commerzbank recommends buying Daimler stock.
Zetsche has vowed that Mercedes will overtake Bayerische Motoren Werke AG (BMW) in global sales by the end of the decade. The brand currently ranks third in deliveries after dropping behind Volkswagen AG (VOW)’s Audi division in 2011.
To win buyers, the Mercedes brand is investing in new entry-level models, such as the CLA four-door compact coupe and the A-Class hatchback, as well as revamping its top-of-the-line S-Class with amenities like a hot-stone massage function in the rear passenger seats. First-half deliveries at the marque rose 6.4 percent to 694,433 cars and sport-utility vehicles, a record for the period, Daimler said on July 3.
Daimler stuck to a forecast today that earnings in the second half of 2013 will be better than in the first half. The company will publish its full quarterly report on July 24.
Second-quarter Ebit at Mercedes-Benz Cars, which includes the Smart city-car brand, dropped to 1.04 billion euros from 1.31 billion euros a year earlier, while revenue increased 6 percent to 16.3 billion euros.
Daimler rose as much as 6.2 percent to 52.37 euros, the highest intraday price since July 26, 2011, and was trading up 6 percent at 4:59 p.m. in Frankfurt. The stock has climbed 26 percent this year, valuing the company at 55.8 billion euros.
The Daimler Trucks division, the world’s biggest maker of heavy vehicles, and the bus unit posted charges totaling 102 million euros for job cuts and other reorganization measures. Ebit at the truck business fell 17 percent to 434 million euros, while earnings at the bus operation were a positive 27 million euros versus a loss of 57 million euros a year earlier.
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