Daimler's 1st-quarter profit slips without one-time gains
BERLIN—Automaker Daimler AG said Tuesday that its first-quarter profit slipped 32 percent from last year, when its results were lifted by a one-time gain from the transfer of shares in Airbus' parent company.
The Stuttgart-based company, whose products include Mercedes-Benz sedans, the tiny Smart car and trucks and buses, earned 1.3 billion euros ($2.03 billion) from January to March compared with 1.9 billion euros in the same period a year earlier when its results were helped by a gain of nearly 1.6 billion euros from the EADS shares.
The figure was below the 1.51 billion euros ($2.4 billion) analysts polled by Dow Jones Newswires had predicted.
First-quarter results were helped by a 449 million euro ($701.7 million) gain from the sale of real estate at the famed Potsdamer Platz in Berlin for nearly 1.4 billion euros ($2.2 billion), and by the transfer of more European Aeronautic Defence & Space Co. NV shares, the parent of Airbus, for a 102 million euro ($159.4 million) gain.
Those gains were offset, however, by 491 million euros ($767.3 million) in expenses related to Chrysler LLC. Daimler sold 80.1 percent of Chrysler to Cerberus Capital Management LP in August 2007. Chrysler now is a privately held company and is no longer required to report its earnings.
Daimler Chief Financial Officer Bobo Uebber told reporters and industry analysts on a conference call that the company reduced the value of its 19.9 percent stake in Chrysler to 547 million euros ($852 million) as of March 31. That's a 40 percent drop from the 916 million euro valuation at the end of 2007.
Daimler also said the loss from its Chrysler stake reduced its earnings before income taxes by roughly 340 million euros ($529 million). The Chrysler expenses also included a 151 million euro ($235 million) write-down of residual values of Chrysler vehicles.
Chrysler said in a statement that it "has enjoyed positive operating earnings" since private equity firm Cerberus Capital Management LP bought an 80.1 percent stake in August of last year.
The loss Daimler reported on its stake in Chrysler was due to charges that Daimler had to take under international accounting rules, according to a Chrysler statement. The charges, dealing with Chrysler restructuring, pension costs and the acquisition by Cerberus, are treated differently under U.S. accounting standards, Chrysler said.
Chrysler said its 2007 financial results are "substantially better" than the results reported by Daimler.
Randy Paschke, chairman of the accounting department at Wayne State University's business school in Detroit, said the charges make it impossible to calculate Chrysler's earnings from Daimler's numbers this quarter. But in the future there should be fewer charges and less of a difference between international and U.S. accounting standards.
Daimler said its sales were up slightly to 23.5 billion euros ($36.7 billion) in the first quarter. That compares with 23.4 billion euros a year ago.
All the company's divisions, save for its Daimler Trucks, posted increased revenue and sales.
Mercedes-Benz Cars, which includes its marquee brand of autos along with the two-seat Smart fortwo, reported pretax profit of nearly 1.2 billion euros ($1.8 billion) in the quarter, up 45 percent from 792 million euros a year ago. Revenue rose 4 percent to 12.5 billion euros ($19.5 billion) from 12.07 billion euros a year earlier, as sales of cars rose 17 percent to 318,300 in the first three months.
Its vans and buses unit reported pretax profit of 371 million euros ($579.8 million) in the quarter, down 80 percent from the 1.8 billion euros in the same period last year. Revenue totaled 3.4 billion euros ($5.3 billion), a 20 percent increase from 2.8 billion euros last year, as van sales rose 11 percent to 68,600 sold, while the number of buses sold was up 11 percent to 9,200 in the first quarter.
Low demand caused by new U.S. exhaust-emission standards and the weakening American economy contributed to Daimler Trucks' pretax profit dropping 24 percent to 403 million euros ($629.8 million) in the first quarter compared with 528 million euros last year.
Daimler Trucks revenue fell 13 percent to 6.3 billion euros ($9.8 billion) in the quarter compared with nearly 7.3 billion euros on flagging sales that saw 107,700 trucks delivered to customers, a drop of 10 percent from the 119,200 last year. The company said the decrease was "primarily due to the significantly lower sales volume in the USA and supplier bottlenecks in Germany."
Daimler shares fell 1.4 percent to 50.19 euros ($78.49).
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AP Auto Writer Tom Krisher in Detroit contributed to this report.
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