Daimler Warns of Stagnant Profits in 2013

Daimler AG cautions investors that earnings at its Mercedes-Benz Cars unit, which fell 15% to €4.4 billion ($6 billion) in 2012, will drop again this year because of Europe's weak market and the brand's sub-par performance in China.

Daimler expects companywide operating income, which slid 10% to €8.1 billion ($11 billion) last year, will flatten in 2013. But it predicts that a second-half rebound will offset a January-June slump. The company also forecasts improving profits at all its units in 2014, aided by a blitz of Mercedes car launches.

In the October-December period, Daimler's revenue grew 3% year on year to €29.8 billion ($40.4 billion). Net earnings jumped 23% to €2.2 billion ($3 billion), thanks to a one-time €709 million gain on the sale of the company's stake in defense company EADS.

For the full year, Daimler boosted revenue 7% from 2011 to €114.3 billion ($154.9 billion). Sales rose 4% to 2.2 million vehicles. Net profit climbed 8% to €6.5 billion ($8.8 billion).

Mercedes Cars hiked revenue 7% year on year to a record €61.7 billion in 2012 as sales rose 5% to 1.45 million vehicles. The luxury unit's earnings before interest and taxes shrank to 1% of sales vs. 9% in 2011. Daimler warned in October that the unit would miss its goal of a 10% profit margin in 2013.