Daimler reports record profit for 2017 on SUV, E-Class sales

 
 
Posted2/1/2018 7:00 AM
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  • FILE - This Thursday, Feb. 11, 2016 file photo shows the Mercedes logo in the grill of a Mercedes 2016 GLE SUV automobile on display at the Auto Show in Pittsburgh. German automaker Daimler AG says Thursday Feb. 1, 2018, its net profit rose 24 percent to a record 10.9 billion euros ($13.5 billion) last year, helped by strong sales of its Mercedes-Benz SUVs and new E-Class luxury sedan.

    FILE - This Thursday, Feb. 11, 2016 file photo shows the Mercedes logo in the grill of a Mercedes 2016 GLE SUV automobile on display at the Auto Show in Pittsburgh. German automaker Daimler AG says Thursday Feb. 1, 2018, its net profit rose 24 percent to a record 10.9 billion euros ($13.5 billion) last year, helped by strong sales of its Mercedes-Benz SUVs and new E-Class luxury sedan. Associated Press

FRANKFURT, Germany -- German automaker Daimler AG said Thursday that its net profit rose 24 percent last year to a record 10.9 billion euros ($13.5 billion), helped by strong sales of its Mercedes-Benz SUVs and the new version of its E-Class luxury sedan.

The Stuttgart-based company issued a measured earnings outlook for this year, saying that operating earnings would be of "the magnitude of the previous year" instead of increasing.

Daimler said its earnings would remain strong but faced the burden of "very high" expenditure on new models and technologies such as battery-powered cars. Like the rest of the auto industry, the company is positioning itself for an anticipated shift to autonomous driving and to transportation services such as car-sharing and ride-hailing through smartphone apps.

Daimler said spending on research and development would "slightly increase" in 2018 after spending 8.7 billion euros in 2017, an increase of 15 percent.

The company's shares dipped on the earnings news and outlook, trading down 1.3 percent at 72.74 euros in morning trading in Europe.

Revenue rose 7 percent on the year to 164.3 billion euros and management proposed its highest dividend to date of 3.65 per share.

Earnings were driven by the Mercedes-Benz luxury car division, which increased sales by 8 percent to a record 2.37 million vehicles sold worldwide. Revenue rose 6 percent to 94.7 billion euros, resulting in divisional earnings before interest and taxes of 9.2 billion euros. That was up from 8.1 billion euros in 2016.

The company said it would pay profit-sharing of 5,700 euros per worker for eligible employees, up from 5,400 euros.

The company's annual news conference began with CEO Dieter Zetsche condemning an experiment commissioned by an industry-backed entity in which monkeys were exposed to diluted diesel exhaust from a Volkswagen vehicle. The entity, known by its German abbreviation EUGT, was backed by Daimler, Volkswagen, BMW and parts and technology firm Bosch.

Zetsche said "such experiments are contrary to our values at Daimler" and said the company's role would be "thoroughly investigated." The company has said that its representative on the EUGT board has been suspended.

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