BERLIN (Bloomberg) -- Daimler AG posted earnings before interest and taxes that missed estimates after boosting development spending for Mercedes-Benz cars. The shares dropped.
The fourth-quarter operating profit of 1.56 billion euros missed the average estimate of 16 analysts surveyed by Bloomberg for profit of 2.03 billion euros. Sales rose 24 percent to 26.4 billion euros, Daimler said in a statement today.
Mercedes-Benz's fourth-quarter profit margin declined to 8.3 percent from 9.5 percent in the third, as Daimler boosted the unit's development spending by 15 percent to 3.1 billion euros in 2010.
Tight vehicle supply is causing delivery delays in Germany, as manufacturers shift cars to the U.S. and China, PricewaterhouseCoopers said in a study Feb. 4.
“There's nothing seriously wrong, but the market was simply expecting more,” said Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler who has a “buy” rating on the shares. “The big question is whether the rally for auto stocks is over.”
The manufacturer, also the world's largest truckmaker, fell as much as 2.39 euros, or 4.3 percent, to 53.59 euros, the steepest decline since Jan. 20. The stock traded at 54.35 euros as of 11:13 a.m. in Frankfurt, valuing the carmaker at 57.9 billion euros. Before today, the shares had gained about 50 percent since the end of 2009.
Daimler reported fourth-quarter net income of 1.14 billion euros, compared with a loss of 352 million euros a year earlier. The figure missed the average estimate of 1.28 billion euros.
Operating profit this year will “clearly” exceed the 2010 level of 7.27 billion euros on record deliveries for Mercedes- Benz vehicles. The manufacturer recommended a dividend of 1.85 euros per share, reinstating the payout after canceling it in 2009 amid uncertainty about auto markets following the global recession.
Daimler CEO Dieter Zetsche said last month growth this year will be constrained by factory limits rather than demand as customers snatch up the next generation C- Class sedan. Delivery times for build-to-order cars in Germany have climbed to 12.9 weeks on average compared with a typical waiting period of eight weeks, PricewaterhouseCoopers said in the study.
“Worldwide demand for motor vehicles will continue to grow this year, but no longer as dynamically as in 2010,” Daimler said in the statement. “The Asian emerging markets and in particular the Chinese market will continue to play a major role. But the outlook remains mixed for the triad markets of Western Europe, the United States and Japan.”
Daimler has revamped the Mercedes CLS luxury coupe and SLK roadster and upgraded the C class, its best-selling model, with a new interior. The company will also start rolling out four compact models, when it debuts an overhauled B class later this year.
Mercedes, BMW AG and Volkswagen AG's Audi, the top three high-end carmakers, are targeting record 2011 sales on growing Chinese wealth and a U.S. spending rebound.
Daimler's trucks unit, which makes Mercedes, Freightliner and Fuso vehicles, aims to average a return on sales of 8 percent over the next three years after shutting plants in Asia and North America during the recession. The company predicts sales over the period to rise more than 40 percent to at least 500,000 vehicles, boosted by a new Indian model line.