Daimler has been reminding investors of the greater second-half expenses for the launch of refurbished Mercedes-Benz models in an attempt to manage earnings expectations, an insider who is familiar with the situation had disclosed. The company has been talking to analysts to focus on the cost of rolling out the next-generation variants of the B-class compact, Actros long-haul truck and M-class SUV.
It has also pointed out raw material and foreign exchange risks, according to the insider who declined to be identified. The expenses of the model will burden second-half earnings by 400 million euros or $548 million to 500 million euros.
On the other hand, foreign exchange and raw material expenditures will contribute around 450 million euros to expenses, according to analyst Arndt Ellinghorst at London-based Credit Suisse. The automaker is aiming for record sales of Mercedes-Benz automobiles this 2011, and last month moved forward with its objective of supplying 1.5 million cars annually to 2014.
Still, worries about the economic climate caused CEO Dieter Zetsche to ask politicians to restore faith in financial markets. German investor confidence in October dropped to lowest in nearly three years, partly due to the debt crisis in Europe. Daimler said on Tuesday that it is standing by a target for a "very significant" increase in 2011 earnings before interest and taxes even while the economy slows down.
Company spokesperson Florian Martens stated that there is "no intention" to modify the current estimate. On October 27, the company will report third-quarter results. Based on the average forecast of 27 analysts that Bloomberg interviewed, Daimler will post a 28 percent rise in EBIT to 9.14 billion euros this year.