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Daimler Abandons Forecast Amid Dismal Market

April 24, 2013 by Leave a Comment

PARIS — Daimler, the maker of Mercedes-Benz cars, said Wednesday that it was abandoning its 2013 profit forecast in the face of a dismal European market.

The company, which is based in Stuttgart and also makes buses and trucks, said it expected demand in Western Europe to continue hovering “around a 20-year low” this year. “The German market,” it added, “cannot detach itself from this development and is expected to fall significantly short of the previous year’s level.”

The carmaker said it still expected group revenue to rise this year. But even operating from the assumption that the second half of the year would be better than the first, it said it no longer believed it would be able to match its 2012 operating profit of about €8.1 billion, or $10.5 billion.

Despite poor sales in Europe, Ford Motor said Wednesday that its net profit climbed 15 percent in the first quarter, to $1.6 billion, as record results in North America compensated for losses in Europe and South America.

The company reported a pretax loss of $462 million in Europe, about triple the $149 million it lost in the region in the first quarter of 2012.

Ford has said it expected a loss of up to $2 billion this year in Europe, where weak economic conditions have driven new vehicle sales to their lowest level in decades.

The company is closing a major assembly plant in Belgium and accelerating other cost cuts in Europe. It said the “outlook for the business environment in Europe remains uncertain.”

Results in Asia, where Ford is investing heavily in new factories and products, improved slightly. The company said it had a pretax profit of $6 million in the region compared with a $95 million loss a year earlier.

Car sales in the European Union totaled just under three million units in the January-March period, down 9.8 percent from the period a year earlier. Last week, the European Automobile Manufacturers’ Association described that as the worst start to a year since it began collecting the data in 1990.

In Germany, sales fell 17.1 percent last month, and the luxury segment, which long escaped the worst of the downturn, is now shrinking as well. In another worrying sign, recent data have shown the German economy, the largest in Europe, losing steam, meaning things may get worse.

European automakers may also find themselves competing at a disadvantage against Toyota, Nissan and Honda, after the Bank of Japan began a campaign to end deflation that has driven down the yen and made vehicles built in Japan relatively less expensive in other markets.

Daimler said its quarterly net profit slid 60 percent from a year earlier, to €564 million. Its earnings before interest and taxes, a measure favored by analysts, fell 56 percent, to €917 million, lower than the most pessimistic forecast in a Reuters survey of analysts. Revenue fell 3 percent, to €26.1 billion.

Daimler had warned this month that it was reassessing its forecasts, raising expectations that its rivals might follow suit. But that caution was not mirrored at Volkswagen, the largest European automaker, which said Wednesday that it planned to meet expectations, holding operating profit steady in 2013.

Despite the difficult market, “we remain confident overall that we can pick up speed over the rest of the year,” Martin Winterkorn, the VW chairman, said in a statement. Volkswagen, based in Wolfsburg, Germany, reports its first-quarter results on Monday.

In Paris, PSA Peugeot Citroën said its first-quarter auto sales fell 10.3 percent, outpacing the European market decline. The French company does not report profit or loss on a quarterly basis.

Peugeot, the second-largest European automaker, relies heavily on the Continent for its sales. It said Wednesday that its efforts to expand in China had paid off well in the first quarter, as its unit sales there increased 31 percent.

Bill Vlasic contributed reporting from Detroit.

Article source: http://www.nytimes.com/2013/04/25/business/global/daimler-abandons-forecast-amid-dismal-market.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

EADS Making Progress at Opening Up Shareholding, Chief Asserts

June 1, 2011 by Leave a Comment

PARIS — The parent company of Airbus is stepping up pressure on its main shareholders to reach an accord in the coming months that would allow any investor to freely buy or sell shares in the company while still preserving the delicate balance of influence between France and Germany in its governance.

“We are pushing at the management level for a solution which allows shareholders to sell their shares if they want,” Louis Gallois, the chief executive of European Aeronautic Defense Space, said during an interview late Tuesday.

The balancing of national interests in EADS, one of Europe’s largest military contractors, was enshrined in a shareholder pact that dates to the group’s creation in 2000. That agreement stipulates that the French and German stakes in EADS must be equal.

Daimler, the German automaker, owns 15 percent of EADS, while a consortium of German private- and public-sector banks holds 7.5 percent, though Daimler holds the banks’ voting rights. The French government and Lagardère, the media-to-missiles conglomerate, own a combined 22.5 percent share.

Both Daimler and Lagardère have made clear in recent years that they do not view their EADS holdings as core to their operations. But the French and German governments have struggled to broker a sale of the shares to other investors in a way that would preserve the ownership balance. Moreover, because of the strategic importance of EADS, both Paris and Berlin have been eager to retain the power to block any potential hostile takeover by a foreign entity.

“We could propose other solutions to protect the company from hostile takeovers,” Mr. Gallois said. “We don’t necessarily need to have controlling shareholders for that.”

Earlier this year, some investors proposed creating so-called golden shares that would give France and Germany a veto over any strategic decision, like a takeover. But such a mechanism is not allowed in the Netherlands, where EADS is incorporated.

Mr. Gallois emphasized that the days of national power struggles and mutual suspicions within EADS had been consigned to the past. In the wake of an industrial crisis that resulted in a two-year delay of the Airbus A380 superjumbo jet, EADS in 2007 streamlined its management, eliminating a cumbersome structure that had placed two chief executives — one German, one French — and two chairmen at the helm.

That change, Mr. Gallois said, “had the immense advantage to make us a much more normal company.” The natural next step in the company’s evolution, he said, was to do away with the enforced balance of French and German ownership.

“I think the balance could be ensured, for instance, by the nationality of members of the board, by majority rules on the board, by agreements on the governance of the company,” Mr. Gallois said. “If there are no longer controlling shareholdings, the question of balance becomes less crucial.”

Any modifications to the shareholder pact could coincide with an expected transition at the top of EADS next year. Mr. Gallois, a 67-year-old Frenchman, is widely expected to step down and to be replaced by Thomas Enders, the 52-year-old German who is chief executive of Airbus.

Mr. Gallois confirmed that the EADS board was “well engaged” in its discussions about his successor, but declined to indicate when an announcement might be made. He also appeared to rule out any dark-horse candidates for the job.

“I am not sure that you will be very surprised,” he said.

Article source: http://feeds.nytimes.com/click.phdo?i=5fcb4aafeb78b58dfbacbb5e6edde898

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Daimler Profit Nearly Doubles in First Quarter

May 1, 2011 by Leave a Comment

FRANKFURT — Daimler said Friday that it nearly doubled its profit in the first quarter as sales in China continued to show big gains and the market for heavy trucks recovered.

The maker of Mercedes cars and Freightliner trucks, based in Stuttgart, said that net profit rose to €1.18 billion, or $1.75 billion, compared to €612 million in the first quarter of 2010. Sales rose 17 percent to €24.7 billion.

The figures were in line with expectations, but shares in the company fell 2 percent as investors registered disappointment that the company seemed to simply be benefiting from an improved global economy.

“I wouldn’t say there is anything particular about their products or way of doing business that is the main reason for the improvement,” said Sascha Heiden, an auto analyst at IHS Global Insight in Frankfurt. “It’s the natural mechanism of volumes bouncing back and purchasing power bouncing back.”

The first quarter result “confirms our positive outlook for the year 2011,” Daimler’s chief executive Dieter Zetsche said. “We are on the right track.”

Like rivals BMW and the Audi division of Volkswagen, Daimler’s Mercedes car division is profiting from the appetite for luxury cars among Chinese buyers. Unit sales in China rose 82 percent to almost 50,000 vehicles, Daimler said.

Daimler also exemplifies the success of Germany’s export economy, which has driven unemployment to a nearly 20-year low of 7.1 percent. Daimler said Friday that it had added almost 2,700 employees in Germany since the end of March 2010, bringing the total inside the country to 164,000.

Car sales also rose modestly in Mercedes’ traditional markets, increasing 4 percent in both the United States and Europe.

The same factors helped sports car maker Porsche, also based in Stuttgart, to more double its operating profit in the first quarter to €496 million, as sales rose 10 percent to €2.3 billion, the company said Friday.

Porsche said profit of the holding company that owns its shares was €691 million in the first quarter, after a loss a year earlier. The result included earnings from the company’s stake in Volkswagen, with which Porsche is in a complex merger process.

Daimler said that truck sales, which tend to closely track economic growth, rose 27 percent to 89,000 vehicles. Operating profit for the trucks division more than tripled to €415 million. Daimler’s commercial vehicle brands include Freightliner in the United States and Mitsubishi Fuso in Japan.

Daimler said it would take charges of €78 million for damages and lost production due to the earthquake and tsunami in Japan and “will remain watchful.” It said the charges do not reflect insurance compensation the company might receive.

Article source: http://www.nytimes.com/2011/04/30/business/global/30iht-daimler30.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,