Daimler Gains on Car, Bus Lines, But Truck-Making Lags
Daimler AG had a strongly profitable fourth quarter to top off a year of modest improvements, but the growth came from the sale of Mercedes-Benz cars and buses, while the global truck division reported double-digit contractions in operating profit and revenue for both the quarter and the year.
In the most recent quarter, Daimler Trucks earned the equivalent of $374.4 million on revenue of $9.13 billion. In the 2015 fourth quarter the division had an operating profit of $690.9 million on revenue of $11.03 billion.
Quarterly operating margin for truck making declined to 4.1% from 6.3%.
“The negative development of earnings was primarily the result of sharply decreased unit sales in the Nafta region, Turkey, the Middle East, Latin America and Indonesia. Earnings were also reduced by intense competition in Europe,” the company said of its truck division in a Feb. 2 earnings statement.
The truck unit is Daimler’s second-largest manufacturing business behind cars, but ahead of vans and buses. Daimler also has a large financial services division. Daimler is the world’s largest truck maker.
For all of Stuttgart, Germany-based Daimler, the company earned the equivalent of $2.38 billion, or $2.17 a share, on quarterly revenue of $44.24 billion. In the 2015 fourth quarter the company had net income of $2.05 billion, or $1.85, on revenue of $44.27 billion.
Looking forward, management expects truck sales this year will be roughly similar to those in 2016, with the second half of the year better than the first six months.
The company said its North American truck sales this year will be driven “by the new Freightliner Cascadia, the flagship in the North American market, which went into production at the beginning of 2017.”
Daimler Trucks global investment was $1.33 billion in 2016, up from $1.22 billion the year before, the company said.
For the year the truck division earned $2.16 billion on revenue of $36.74 billion, down from 2015 when it earned $2.86 billion on revenue of $41.71 billion.
Daimler AG’s full-year revenue rose to $169.66 billion from $165.91 billion in 2015.
