Daimler’s profit rises 39% in 4Q, aided by Mercedes-Benz M-, C-Class models

Article by Christian Andrei, on February 9, 2012

Daimler posted a 39% gain in fourth-quarter profit, helped by the demand for the refurbished Mercedes-Benz C-class and M-class models. Earnings before taxes and interest increased to 2.18 billion euros or $2.9 billion from 1.56 billion euros during the same period last year, the company revealed. The results were comparable with the 2.17 billion-euro average estimate of 12 analysts that Bloomberg had surveyed.

Sales increased 10% to 29.1 billion euros. After net income for 2011 advanced 29 percent to 6.03 billion euros, the company offered a dividend of 2.20 euros for 2011. This is higher than the 1.85 euros of the previous year. Daimler, which is also the largest manufacturer of heavy-duty vehicles in the world, estimated a 2012 EBIT "in the magnitude of last year."

The company has promised to take back its lead in the luxury vehicle segment from BMW after slipping last year to third place behind Audi. In 2011, Mercedes sold 1.26 million automobiles, behind BMW with 1.38 million units and Audi with 1.3 million.

To outperform its competitors, Mercedes intends to launch 10 new models by 2015. These include compacts and the CLS Shooting Brake, a wagon-like version of the $71,300 four-door coupe. The costs to launch the vehicles and an overhauled Actros long-haul truck may encumber 2012 earnings.

Analyst Albrecht Denninghoff at Frankfurt-based Silvia Quandt Research commented that the dividend is "surprisingly good and higher" compared to what the market was expecting. He added that the numbers are in line, while the outlook is "cautious". He added that they are staying with their buy recommendation.

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