Daimler wants to remind investors of the higher costs for the new Mercedes-Benz models

Article by Christian Andrei, on October 19, 2011

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. 

If you liked the article, share on:


Login or Create new account to add a comment!


Many have been excited with the impending arrival of the next-generation Jeep Wrangler and the new 2019 Jeep Grand Wagoneer, which is slated to be the brand’s new range-topping model....
by - October 21, 2016
Chevrolet has taken the wraps off its new Chevrolet Colorado ZH2 at the fall meeting of the Association of the United States Army (AUSA). Tagged as the most extreme fuel-cell-powered...
by - October 21, 2016
Honda has unveiled the fifth generation of its hot-selling SUV – the 2017 Honda CR-V. The latest iteration of the CR-V should help it maintain its benchmark status in the...
by - October 21, 2016
Many are already expecting BMW to launch an ultra luxurious SUV that will serve at its new flagship by late 2018. Larger than the X5 and X6, the new X7...
by - October 21, 2016
Most of you may have heard or already have one of those autonomous home appliances doing the house chores. Thus, it’s not anymore unusual to see a car going places...
by - October 20, 2016