Daimler profit slips on one-time factors, but outlook raised
FRANKFURT, Germany (AP) - Automaker Daimler AG saw first-quarter net profit fall 11 percent due to shifting currency exchange rates and one-time gains in the year-earlier quarter.
But the company had stronger earnings from its Mercedes-Benz luxury car division and raised its profit forecast for the year, saying earnings will increase slightly even as it spends heavily on new technology.
The previous outlook was for earnings about the same as last year's.
For the first quarter, net profit was 2.35 billion euros ($2.85 billion), down from 2.65 billion euros a year earlier, when the company's Mitsubishi Fuso truck business sold real estate worth 267 million euros. It also booked a gain a year earlier from the revaluation of the company's stake in Chinese partner BAIC Motor Corporation.
Currency exchange rate shifts had a "slightly negative" effect on earnings, the company said Friday.
CEO Dieter Zetsche pointed to a 7 percent increase in vehicle unit sales in the quarter, to 807,000 vehicles worldwide. "We are sustainably continuing along our profitable growth course and sold more vehicles than ever before in a first quarter," he said.
Daimler is counting on continued strong profits to fund its investments in new technologies expected to reshape the auto industry. Those include electric and autonomous vehicles and increasing use of cars as a temporary service. The company pushed in that direction by agreeing in March to combine its mobility service division including its car-sharing business with BMW's services business.
Revenue increased 3 percent to 39.78 billion euros ($48.2 billion) and the Mercedes division's profit rose 3 percent. Strong sales of the flagship S-Class luxury sedan and sport-utility vehicles boosted earnings at the division. The division's return on sales - a key measure of profitability - increased to 9.0 percent from 8.9 percent in the year-earlier quarter. Profits slipped however at the company's van and bus divisions.
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This story has been corrected to give the spelling of the CEO as Zetsche, instead of Zetsch.