earnings reports

Daimler lifts outlook on higher Q3 2020 profits

Agence France-Presse, Agence France-Presse
Daimler lifts outlook on higher Q3 2020 profits

Details of a Mercedes-Benz are seen at The Economic Club's Winter Luncheon at the Marriott Marquis in Washington, DC, on January 10, 2020. Sarah Silbiger/Getty Images/AFP

The Mercedes-Benz maker cites 'improving markets and strong products, combined with diligent cost discipline and extensive cash-preservation measures'

German auto giant Daimler, maker of Mercedes-Benz, said on Friday, October 23, that it was upgrading its earnings forecast for the whole of 2020 after group profits rose in the 3rd quarter.

“The key figures reflect a good performance based on improving markets and strong products, combined with diligent cost discipline and extensive cash-preservation measures,” the carmaker said in a statement.

In the 3 months to September, Daimler’s net profit rose to 2.2 billion euros ($2.6 billion) from 1.8 billion euros in the same period a year earlier. 

Underlying or operating profit rose amounted to 3.1 billion euros compared with 2.7 billion euros a year earlier.

Revenues, however, dipped 7% to 40.3 billion euros. 

“Our strong product portfolio and the positive market recovery drove us to a good performance,” said finance chief Harald Wilhelm.

With continued efforts to control costs, “we are on track to make our business more weatherproof,” Wilhelm said.

Like most of the industry, Daimler was badly hit earlier this year by factory and showroom closures imposed by the government as part of nationwide lockdowns to rein in the spread of the coronavirus. 

The measures pushed Daimler deep into the red in the 2nd quarter, when it booked a net loss of 1.9 billion euros.

However, a second wave is now rolling across Europe and Germany on Thursday, October 22, reported a record number of new cases. 

Daimler said it is expecting underlying or operating profit for the whole year to reach last year’s level of 4.3 billion euros, assuming that conditions in its major markets do not deteriorate due to the pandemic. 

In October, Daimler had said it would slash costs by 20% by 2025, including through staff adjustments, as it struggles to refocus on the electric vehicle market.

Late last year, it had said it would eliminate 10,000 jobs through voluntary redundancies, but the German media has suggested as many as 30,000 jobs could go.

The Stuttgart-based company also agreed in August to pay $2.2 billion to US authorities to settle civil cases over the “dieselgate” emissions-cheating scandal that has rocked Germany’s cherished car industry. – Rappler.com

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