FRANKFURT -- Daimler AG reported a decline in quarterly profit for the first time in two years on slowing sales growth and costs to introduce new models.
Earnings before interest and taxes in the third quarter declined 19 percent to 1.97 billion euros ($2.75 billion) from 2.42 billion euros a year earlier, the Stuttgart-based company said today in a statement. The figure missed the average estimate of 2.19 billion euros, based on a Bloomberg survey of 18 analysts.
Daimler's Mercedes-Benz slipped behind Volkswagen AG's Audi this year in sales, as the brand renews the $48,990 M-class SUV and B-class compact. The overhauls led to slower sales in the third quarter with deliveries rising 3.9 percent, dragging down growth through the first nine months to 7.6 percent. The earnings drop was the first since the third quarter of 2009.
"Daimler is being effected by Mercedes's product cycle but also higher raw material and foreign exchange expenses," Daniel Schwarz, a Frankfurt-based Commerzbank analyst who recommends buying the shares, said prior to the earnings release. "We're not anticipating an impact from the economy just yet."
Daimler, the world's third-largest maker of luxury vehicles, has fallen 25 percent this year as investors fear the debt crisis in Europe will burden demand for cars and trucks. PSA/Peugeot-Citroen SA, Europe's second-largest carmaker, yesterday cut its target for 2011 auto profit and said it may cut as many as 6,000 full-time and temporary jobs as pricing pressure intensifies.
Net income fell 16 percent to 1.36 billion euros. Sales rose 5 percent to 26.4 billion euros.
Daimler today stood by its target for a "very significant" rise in 2011 EBIT after last year's 7.27 billion euros. Sales were forecast by the company to exceed 100 billion euros. The automaker predicted record sales of more than 1.35 million Mercedes and Smart cars this year. The company, also the world's largest manufacturer of commercial vehicles, projected "strong" growth in truck sales.
Daimler last month moved forward its goal of delivering 1.5 million Mercedes cars by one year to 2014. To support growth, the company plans to invest $2.4 billion at its U.S. factory to increase capacity and buy equipment for an unidentified new model. It also plans to produce its best-selling C class at the plant from 2014.
CEO Dieter Zetsche has vowed to challenge BMW AG for the global lead in luxury-car sales. To that end, the manufacturer is preparing to introduce 10 new cars over the next four years, including compacts and high-end variants of the S-class flagship.
The Germany automaker's ambitions took a knock this month after it dismissed Ernst Lieb as head of Mercedes's U.S. sales unit and canceled a dealer event. The company temporarily appointed Herbert Werner, the unit's chief financial officer, to oversee its second-largest market.