Merc sales driving Daimler

City A.M. Reporter
GERMAN carmaker Daimler yesterday posted disappointing fourth-quarter earnings, with an upbeat outlook failing to deliver the detail that analysts said was needed to reassure investors.

“On balance, a weak fourth quarter 2010 and no specific 2011 outlook”, wrote JP Morgan analyst Ranjit Unnithan in a research note.

Daimler, which ditched its dividend last year, predicted a considerable gain in earnings this year on better sales of its Mercedes premium cars and a turnaround at its industry-leading trucks business.

It also proposed a higher-than-expected annual dividend, planning to pay €1.85 (£1.56) per share for the 2010 business year, it said.

The mid-range estimate in an analyst poll predicted a dividend of €1.75 per share, above the 10-year average of €1.58 when excluding last year – the first time Daimler had to scrap a payout since 1995.

The company said 2011 earnings before interest and tax would be significantly above last year’s figure, having previously said 2011 would be a “very good” year.

Daimler posted fourth-quarter earnings before interest and taxes of €1.56bn, compared with a forecast for €2.05bn. Daimler chief financial officer Bodo Uebber told a news conference he expected global car markets to grow five to seven per cent in 2011.

Daimler raised its outlook three times last year, most recently forecasting in October that group EBIT would top €7bn for 2010.

Group full-year industrial free cash flow doubled to €5.4bn from €2.7bn in 2009.