Daimler has lowered its profit forecast for full year 2013 after posting a 56-percent drop in earnings before interest and taxes (EBIT) in the first quarter of the year. Daimler disclosed in a statement that its EBIT dropped to EUR917 million in the first three months of 2013, compared to EUR2.1 billion in the same period in 2012.
As a result of the decline, Daimler now expects to post a full-year 2013 EBIT lower than the EUR8.1 billion ($10.6 billion) posted in 2012. The carmaker previously expected to match its 2012 results. Daimler chief executive Dieter Zetsche attributed the decline to several markets developing worse than expected due to economic reasons.
The company’s Mercedes cars division logged a 63-percent decline in first-quarter sales to EUR460 million and a 6-percent drop in revenues to EUR14.1 billion. Mercedes saw its return on sales slide to 3.3 percent from 8.2 percent a year ago. Daimler expects the unit to post a drop in earnings for the full year 2013.
Daimler Chief Financial Officer Bodo Uebber made a warning that their business could still suffer to some setbacks in Europe this year. He remarked that the crisis is not yet over, and that it is having a negative effect on investments and purchasing behavior. Christian Ludwig, an analyst with Bankhaus Lampe, described Daimler’s results as “a little disappointing.”
He said that 2013 will probably be another transition year, which will not have “any positive impulses for the share price.” He noted that Daimler's guidance remains “quite vague." Daimler still expects its earnings to surge in the second half of 2013 as it anticipates better sales thanks to the recently launched Mercedes CLA compact and a revamped version of the E class. Uebber said that Daimler’s results in the second quarter of 2013 should be better than in the first three months.