Daimler quarterly profit plunges 74 pc

October 28, 2009 09:48:18 AM

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German auto giant Daimler said Tuesday that its third quarter net profit plunged 74 percent from a year earlier but stressed that it had managed to survive a global crisis in the sector.

Daimler's profit fell to 56 million euros (83 million dollars), a statement said, but nonetheless remained in positive territory.

The maker of Mercedes-Benz automobiles said it should also post a profit in the last three months of the year.

"Over recent months we have increasingly overcome the crisis," the German-language statement quoted Daimler head Dieter Zetsche as saying.

"Daimler was able to maintain its financial flexibility, intensify measures to improve efficiency and simultaneously drive the development of new products and markets," he added.

Third quarter sales lost 21 percent to 19.3 million euros, Daimler said, confirming provisional figures released last week.

Core earnings fell to 470 million euros from 648 million in the third quarter of 2008 but showed a strong gain from earlier this year.

Earnings before interest and taxes (EBIT) had posted a loss of one billion euros in the second quarter of 2009 and a loss of 1.4 billion in the first three months of the year.

"After returning to profitability in the third quarter of 2009, Daimler anticipates positive EBIT from its ongoing business also in the fourth quarter," the statement said.

A total of 386,461 vehicles were delivered in the third quarter, a year-on-year decrease of 26 percent, with a particularly sharp drop of 46 percent in the number of heavy trucks sold.

Compared with the previous quarter however, the overall fall in the number of vehicles sold was limited to just one percent.

The company released provisional figures last week that were better than expected by analysts, including a return by Mercedes Benz to profit.

Mercedes' results should improve slightly again in the fourth quarter, the company said on Tuesday.

It has also decided to increase the size of a cost-cutting plan that was initially set at four billion euros, without providing details.

For the full year, Daimler "anticipates significant decreases in unit sales and revenue," the statement said.

Looking ahead, 2010 "will remain challenging due to the still-difficult situation of automobile markets worldwide," it added.

Daimler stressed however that it "has a sound financial position, which should remain stable also during the fourth quarter."

It intended to go to capital markets "only to a slight extent during the rest of this year" in a bid to alleviate concern over the group's financial footing.

Daimler shares showed a loss of 1.06 percent to 35.45 euros in midday trading, while Frankfurt's DAX index of leading shares was 0.32 percent higher overall.