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Daimler Sets Aggressive Cost Targets, Cuts Outlook
Daimler AG lowered its forecast for 2012 profit because of deteriorating market conditions worldwide.
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Daimler AG lowered its forecast for 2012 profit because of deteriorating market conditions worldwide.
The company intends to garner "benefits" of €2 billion ($2.6 billion) by the end of 2014 from sales growth and improved pricing and unspecified reductions to spending on materials, production, fixed costs, R&D and capital expenditures.
Daimler also scrapped its targets for operating returns on sales for 2013. The company previously aimed for car and truck operating margins of 10% and 8%, respectively.
Daimler now expects to earn €8 billion ($10.4 billion) before interest and taxes this year, down from its previous goal of matching last year's €9 billion income. The carmaker predicts lower EBIT at all its units, including €4.4 billion ($5.7 billion) for Mercedes-Benz Cars and €1.7 billion ($2.2 billion) at its truck division.
The forecasts accompanied Daimler's report of third-quarter results, which was inadvertently released on Wednesday, one day ahead of schedule.
The company netted €1.2 billion ($1.6 billion) in the July-September period compared with €1.4 billion ($1.8 billion) a year earlier. EBIT slid 2% to €1.9 billion ($2.5 billion), partly because of increased spending to develop and launch new cars and commercial trucks, according to Daimler.
Revenue grew 8% to €28.6 billion ($37.3 billion), thanks largely to favorable exchange rates. Group sales edged up 1% to 528,600 vehicles.
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