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Daimler Q4 Profit Down, Cuts Dividend; Sees Slight Growth In FY19; Stock Dips

daimler oct25 06feb19 lt

Shares of Daimler AG (DDAIF.PK) were losing around 2 percent in the early morning trading in Germany after the automaker on Wednesday reported that its fourth-quarter profit halved, despite higher sales and unit volume. The company also trimmed its dividend.

Looking ahead, for fiscal 2019, the company expects slight increase in Group EBIT, revenues and unit sales. The company noted that earnings will be adversely affected by ongoing high advance expenditure for the model offensives and innovative technologies.

The owner of Mercedes-Benz Cars said it expects worldwide demand for passenger cars in 2019 to remain roughly at the prior-year level.

Bodo Uebber, Member of the Board of Management, said, "Our unit sales and revenue figures for both the Group and the divisions show that our product range is as attractive as ever and that customer demand remains high. Our core business is very well positioned despite the challenging conditions. We have therefore achieved a high level of earnings overall. But at the same time, we have to work hard to achieve our target margins on a sustainable basis."

For the fourth quarter, net profit attributable to shareholders plunged 50 percent to 1.56 billion euros from last year's 3.13 billion euros. Earnings per share decreased to 1.46 euros from 2.93 euros a year ago.

In the last year, the company recorded 1 billion euros of benefit due to the one-time effect of the US tax reform.

Earnings before interest and tax or EBIT was 2.67 billion euros, down 22 percent from 3.42 billion euros in the prior year.

Group revenue was up 7 percent to 46.61 billion euros from 43.61 billion euros in the previous year.

Daimler increased its unit sales by 5 percent in the quarter to 917,756 vehicles from 873,040 vehicles a year ago.

At the annual shareholders' meeting on May 22, the Board of Management and the Supervisory Board will propose a dividend of 3.25 euros per share, lower than prior year's 3.65 euros per share.

In Germany, Daimler shares were trading at 51.86 euros, down 1.98 percent.

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