Daimler expects operating profit in 2013 to be unchanged from last year

Article by Anita Panait, on February 8, 2013

Daimler expects that for this year, it will post more or less the same level of profit logged in 2012 as the carmaker continues to invest in new models and to revamp its operations. The German carmaker posted a 10-percent drop in earnings before interest and taxes (EBIT) from ongoing business in 2012 to EUR8.1 billion ($11 billion).

Daimler chief executive Dieter Zetsche said in a statement that the carmaker failed to reach its targets for earnings and profitability in 2012. He remarked that Daimler has implemented detailed measures in all divisions to ensure that its future growth is even more profitable. According to Daimler, it posted a 6.7-percent jump in EBIT in the fourth quarter of 2012 to EUR2.32 billion.  The carmaker’s earnings were boosted by EUR709-million gain from selling a 7.5 percent stake in EADS, the parent of plane-maker Airbus.

Zetsche disclosed an efficiency program in September 2012 dubbed "Fit for Leadership," targeting to slash EUR2 billion from spending at Mercedes by the end of 2014. The carmaker’s Daimler Trucks unit, regarded as the largest maker of heavy vehicles in the world, is planning to cut 2,100 jobs from its workforce, including 1,300 workers in North America. Daimler is spending EUR10.8 billion in the next two years on research and development.

Its Mercedes-Benz unit is rolling out a reworked version of the E-class sedan this year. Mercedes is also adding the four-door CLA coupe to its compact-car line-up and selling the next generation S-class in the second half of 2013. In October 2012, Daimler revised its full-year EBIT guidance to reflect a drop to around EUR8 billion, from figures "in the magnitude" of 2011 level. Daimler also announced a proposal to keep the dividend at EUR2.20 per share.

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