Daimler Reports Significantly Higher Q1 Net Income
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Daimler Group reported higher net income and improved revenue in the first quarter as total vehicle sales climbed 13% compared with a year earlier.
Germany-based Daimler — which reports in euros — posted profits of $5.1 billion, or $4.84 per share, compared with $202 million, or 11 cents, a year earlier.
Revenue increased to $49.5 billion compared with $44.9 billion, in the 2020 period.
Its return on sales was 15.2% compared with 2.2% a year earlier. In the first quarter of 2020 the harsh effects of the novel coronavirus led to falling demand and temporary halts in production.
Harald Wilhelm by Daimler
“We are very confident that we can keep up the pace to improve our margins on a sustainable basis and at the same time expand our electric vehicle lineup,” Daimler Chief Financial Officer Harald Wilhelm said, according to Bloomberg News. Plans to spin off and list the Daimler truck unit before year-end are “well on track.”
The company acknowledged the current worldwide supply shortage in certain semiconductor components affected deliveries in the first quarter. It anticipated this shortage could further impact sales in the second quarter. Although visibility is limited at present, Daimler assumed some recovery in the third and fourth quarter.
Total vehicle sales rose 13% to 728,609 compared with 644,316 a year earlier.
Mercedes-Benz cars and vans, its largest unit, sold 627,287 vehicles compared with 546,742 a year earlier. Revenue increased 16% to $32.3 billion.
Daimler Trucks and Buses sold 101,322 vehicles. A year earlier it sold 97,574. Revenue slipped 1% to $10.3 billion.
Major sales markets for heavy-duty trucks continued along their cyclical recovery path in the first quarter, the company reported. The North American Class 8 market grew by about 14% compared with the prior-year period. Growth in the EU 30 region was at a similar rate of 16%.
Daimler Trucks’ unit sales of 97,600 vehicles were 6% above the prior-year level.
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Earlier in the quarter, the company announced its board is evaluating the spinoff of the truck and bus business and starting preparations for an initial public offering of shares in Daimler Truck — the world’s largest truck maker.
Under the plan, most of the shares in Daimler Truck will transfer to current Daimler shareholders. The goal is for Daimler Truck to gain full entrepreneurial freedom and an independent corporate-governance structure with an independent supervisory board chairperson.
As part of a more focused corporate structure, both Mercedes-Benz and Daimler Truck will be supported by dedicated captive financial and mobility service entities.
New business at Daimler Mobility, its financial and mobility services unit, increased slightly compared with the first quarter of last year, by 4% to $20.2 billion. In China, new business was actually significantly higher than in the prior-year period, while there was slight growth in Europe.
In the Americas and Africa & Asia-Pacific regions, however, new business decreased significantly.
Worldwide, Daimler Mobility brokered 621,000 insurance policies in the first three months of this year. A year earlier it brokered 520,000.
Among other quarterly highlights: Daimler is partnering with Volvo Group on the development of fuel cells in a venture named Callcentric.
It also reported Cummins Inc. will supply Daimler trucks and buses with medium-duty engines in the second half of 2020.
Daimler forecast the world economy will be able to recover from the pandemic-related weakness of the year 2020, aided by the increasing availability of effective vaccines, among other things.
Based on the expected market development and the current assessments of the divisions, Daimler said it continues to anticipate group unit sales, revenues and earnings before interest and taxes in 2021 to be significantly above the prior year’s level.
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