Daimler expects 2019 profits to drop significantly

Daimler issued its third profit warning for 2019, as costs related to diesel-emissions allegations, heavy investment in electric vehicles and production issues weighed on earnings.

Earnings before interest and taxes fell by about half to 5.6 billion euros ($6.2 billion) for the year, Daimler said on Wednesday in a preliminary earnings statement.

That’s before another 1.1 billion to 1.5 billion euros in legal and governmental costs in various markets where Mercedes-Benz diesel cars and vans are sold.

Daimler said that it expects the return on sales at Mercedes-Benz Cars, which includes the Smart brand, to slump to 4 percent in 2019, compared to 7.8 percent in 2018.

At its vans division, the company expects the return on sales to decrease to minus 15.9 percent from plus 2.3 percent and to 6.1 percent from 7.2 percent at its trucks unit.

One-off costs of 300 million for a review of its vans product portfolio as well as another 300 million for the realignment of its Your Now mobility services are included in the preliminary figure, Daimler said.

The weak earnings contrast with Daimler’s car sales. It sold 2.34 million Mercedes cars in 2019 for a ninth consecutive year of record sales, putting the automaker in pole position to retain the title of world’s biggest-selling premium car brand.

Via Automotive News