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Daimler posts $1.51 bn loss in Q2

Daimler posts $1.51 bn loss in Q2
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First Published: Wed, Jul 29 2009. 05 30 PM IST
Updated: Wed, Jul 29 2009. 05 30 PM IST
Berlin: Germany’s Daimler AG said on Wednesday that it lost €1.06 billion ($1.51 billion) in the second quarter as the recession hurt car and truck sales and the company took charges related to its stake in Chrysler.
The company’s highly cyclical truck business — the world’s largest by sales — saw unit sales plunge 60%. But the quarterly result was better than analyst predictions and the company’s shares rose.
The loss in the April-June period compared with a profit of nearly €1.3 billion a year earlier. Analysts surveyed by Thomson Reuters had expected a net loss of €1.5 billion.
Despite the third quarterly loss in a row, the company predicted a “gradual improvement” in its operating profit in the coming months.The news helped push Daimler shares up nearly 5.4% to €31.68 in Frankfurt trading.
Sales fell 25% to €19.6 billion in the quarter compared with €26 billion last year, below the €20 billion that analysts had forecast, a stark reminder of the bleak landscape that car makers worldwide face amid the economic crisis.
Stuttgart-based Daimler, whose brands include Mercedes-Benz, Maybach and Smart, said sales across all of its units, including luxury cars, vans, trucks and buses slid 31% in second quarter compared to last year with just 391,500 sold worldwide.
Looking ahead to the end of 2009, the automaker said that total sales were likely to “decrease significantly” from last year when it sold 2.1 million vehicles.
Other factors that weighed on the figure included its relinquishing a 19.9% equity stake in Chrysler Group LLC effective 3 June.
Daimler will take €387 million in expenses related to the stake during the second quarter. Chrysler restructured in bankruptcy court and emerged in an alliance with Italy’s Fiat SpA.
However, Daimler said the effects were partially offset by a transfer of charges in stock in aerospace concern EADS NV which saw it gain €35 million.
Daimler’s trucks unit saw its second-quarter revenue fell to €4.2 billion from €7.4 billion a year ago. The truck business pretax loss was €508 million compared with a profit of €608 million last year, with factors including the restructuring of the North American truck business.
The truck division’s unit sales decreased by almost 60% to 54,100 units for the quarter, but Daimler said its market share increased in nearly all its major markets.
Daimler is the world’s biggest truckmaker by sales with brands including Mercedes, Freightliner and Fuso.
The Mercedes-Benz Cars division saw unit sales fall 19% to 287,200 cars for the quarter compared with 354,000 last year. However, Daimler said the second quarter’s deliveries improved by 24% over the first quarter, indicating the sales skid may have bottomed out.
That put second quarter revenues for the cars division at €10.6 billion compared with near €13 billion in the year-ago quarter, an 18% decline.
The company said the cars division’s pretax loss was €340 million compared with a profit of €1.2 billion a year earlier.
Daimler said however, that its efforts to cut costs and optimize operations showed positive effects during the April-June period and first six months.
Daimler enacted shorter work schedules for some of its production to respond to the lower demand during the first half of the year, for example. Some of those programs have been scaled back, while some remain in place.
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First Published: Wed, Jul 29 2009. 05 30 PM IST