Daimler Raises Outlook – Analyst Blog

Daimler AG (DAI) has upgraded its 2010 outlook for earnings before interest and taxes (EBIT) in its Mercedes-Benz Cars and Daimler Trucks divisions. The company now anticipates an EBIT of €2.5 billion to €3 billion ($3.5 billion to $4.2 billion) in its Mercedes-Benz Cars division compared with the prior guidance of €1.5 billion ($2.1 billion). The company also expects an EBIT of €500 million to €700 million ($698 million to $977 million) in its Daimler Trucks division, up from the previously projected €200 million ($279 billion).

 

Daimler’s optimism is supported by strong sales, favorable mix and pricing in the Mercedes-Benz Cars division during the first quarter. In the first quarter of 2010, sales at Mercedes-Benz Cars, including the Mercedes-Benz and smart fortwo brands, increased 11% on a year-over-year basis. Sales of Mercedes-Benz brand cars went up 15% to 248,500 vehicles, while sales of smart fortwo cars dipped 21%.

 

Sales at Mercedes-Benz Cars were fueled by impressive sales of its sporty C-Class, the new ninth generation E-Class and GLK, the compact SUV. The company anticipates a strong demand in the division with the launch of the new generation of the smart fortwo (electric) model in the third quarter of 2010.

 

In the Trucks division, Daimler intends to achieve an average return on sales of 8% throughout its business cycle. The company has the advantage of an extremely versatile product range in the division. This includes economical and environment-friendly trucks with the BLUETEC technology for the European markets, the new generation of Actros trucks and the new Cascadia heavy-duty truck under the Freightliner brand of North America.

 

Daimler had announced plans to expand the production capacity of trucks, buses and components in the Mercedes-Benz plant of Sao Bernardo do Campo in Brazil by investing $894 million by 2011. Daimler Trucks has also entered the Russian market through its partnership with KAMAZ. Sales for new trucks in Russia are expected to increase by about 20% over the next two years, driven by the demand for heavy-duty trucks.