Daimler Expects Earnings to Slow

Daimler AG anticipates only “slight” growth in earning this year as it further ramps up spending to develop advanced technologies.

The company reports full-year record unit sales (+5% to 3 million vehicles), revenue (+3% to €153 billion/$166 billion) and net profit (+1% to €8.8 billion/$9.5 billion) for 2016. Adjusted earnings before interest and taxes rose 3% to €14.2 billion ($15.4 billion).

Revenue in last year’s fourth quarter grew 1% to €41 billion ($44.4 billion). Adjusted earnings before interest and taxes rose 3% to €3.6 billion ($3.9 billion), and net profit jumped 18% to €2.2 billion ($2.4 billion). Unit sales, including vans, buses and commercial trucks, rose 5% to 3.0 million units.

CEO Dieter Zetsche notes that the group hiked its already-high r&d spending last year 15% to €7.6 billion ($8.2 billion). He cautions that short-term profits may be lower as Daimler continues to spend heavily on vehicle connectivity, autonomous driving systems, flexible mobility services and electric powertrains.

Daimler expects the global economy will expand 2.5%-3% this year, about the same as in 2016. The company also forecasts that demand for cars will advance about 1%, including a “slight” increase in sales for Mercedes-Benz Cars.