2nd UPDATE: Daimler 3Q Net EUR41 Million; Sees Negative 4Q Cash
Flow
(Adds detail and comment.)
By Christoph Rauwald
Of DOW JONES NEWSWIRES
STUTTGART, Germany -(Dow Jones)- Daimler AG (DAI) said Tuesday it still
expects full-year revenue to slide significantly from 2008, but confirmed that
after posting steep first-half losses it swung to net profit of EUR41 million in
the third quarter as sales at its Mercedes-Benz division improved.
The German automaker said it anticipates negative cash flow in the fourth
quarter due to higher payments to suppliers and a seasonal inventory increase
toward the end of the year, but reiterated that it expects positive cash flow
for the full year.
"We are now very well positioned and can look with confidence to the coming
year, which will remain challenging due to the still-difficult situation of
automobile markets worldwide," Daimler Chief Executive Dieter Zetsche said in a
statement.
Car sales in the fourth quarter are expected to be higher than in the third
quarter, driven mainly by the new generation of the Mercedes-Benz E-Class, a
crucial model for the unit both in terms of earnings and revenue per vehicle.
At 1503 GMT, Daimler shares traded down EUR0.88, or 2.5%, at EUR34.95, while
the blue-chip DAX index traded up 0.2%.
Stuttgart-based Daimler Oct. 19 announced that earnings and particularly cash
flow in the third quarter were better than analysts had expected, leading it to
release preliminary key earnings figures ahead of schedule.
Daimler's closely watched earnings before interest and tax, or EBIT, fell to
EUR470 million in the third quarter, while revenue skidded to EUR19.3 billion.
In 2008, Daimler posted EUR648 million in third-quarter EBIT and EUR24.47
billion in revenue.
The company recognized a EUR48 million gain on the valuation of Chrysler
related assets, while it booked a EUR3 million charge in the third quarter for
the restructuring of Daimler's truck unit in North America and Japan.
Earlier this year, Daimler sold its remaining 19.9% stake in Chrysler LLC to
Cerberus Capital Management LP.
Daimler's net liquidity stood at around EUR6.7 billion at the end of the third
quarter compared with EUR4.6 billion at the end of June.
The company's Mercedes-Benz Cars division, which comprises the Mercedes-Benz,
Smart and Maybach brands, swung back into the black and posted EUR355 million in
third-quarter EBIT compared with a EUR1.46 billion loss in the first half of the
year.
Daimler's truck unit, the world's largest truck maker by sales, posted an EBIT
loss of EUR127 million in the third quarter. The company said its truck unit is
likely to post another EBIT loss in the fourth quarter, partly due to further
restructuring charges, as market conditions remain grim. Truck sales in the last
three months of the year are expected to come in at around the level of the
third quarter.
The Mercedes-Benz vans unit eked out a EUR1 million profit, with the company's
bus operations contributing EUR23 million to the group's EBIT. Daimler's
financial services unit's EBIT came in at EUR101 million.
Reacting to sharply contracting demand for trucks and luxury cars amid the
economic downturn, Daimler initiated a wide-ranging program to trim costs by
EUR4 billion this year and streamline the organization. Zetsche recently said
that the company was on track to exceed this target significantly.
Chief Financial Officer Bodo Uebber told analysts Daimler wanted to save even
more costs in 2010 than the planned savings of more than EUR4 billion this year.
Web site: www.daimler.com
-By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512;
christoph.rauwald@dowjones.com
(END) Dow Jones Newswires
10-27-091125ET
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