German car and truck maker Daimler reports 4th quarter net loss of $482 million

Daimler Q4 net loss disappoints markets

STUTTGART, Germany — German car and truck maker Daimler AG lost €352 million ($482 million) in the fourth quarter amid the global economic slump, contributing to a larger-than-expected loss on the year and sending shares down sharply.

The figure announced Thursday compares with a €1.53 billion loss in the fourth quarter of 2008. Both 2008 and 2009 results were weighed down by charges from Chrysler LLC, with which Daimler was once merged, among other items.

Revenue for the October-December period fell to €21.3 billion from €23.2 billion in the fourth quarter of 2008.

For the full year, the company lost €2.6 billion, compared with a net profit of €1.4 billion in 2008. Revenue fell 20 percent to €79 billion from €98 billion. Unit sales dropped 25 percent to 1.6 million cars, trucks, vans and buses, from 2.1 million in 2008.

The result was significantly worse than expected by twenty-six analysts surveyed by Thomson Reuters, who predicted a 2009 loss of €1.7 billion.

Daimler also said its management board has recommended that no dividend be paid for the year.

The news sent Daimler shares down 5.3 percent to €31.25 in Frankfurt afternoon trading, making the stock the worst performer on the DAX index of blue chips.

The 2009 charges included €294 million to settle Daimler’s disposal of the last remaining 19.9 percent stake in Chrysler LLC; and restructuring at Mitsubishi-Fuso and Daimler Trucks North America totaling €340 million. The financial services division also saw a charge of €100 million on the valuation and disposal of some assets.

Bernstein analysts, however, said the results were not entirely negative considering the economic situation of the last year.

“Daimler’s Q4 only met, rather than beat, official consensus with earnings before interest and taxes of €599 million versus consensus of €624 million, and fell short of the more bullish forecasts, including our own of €835 million,” Bernstein said in a note to clients.

“We believe Daimler can demonstrate a number of years of incremental improvements as it recovers. We expect Mercedes to be solidly profitable in 2010 and see longer term potential due to further growth in highly profitable emerging markets.”

Bernstein rates Daimler stock at “outperform” with a target of €45.

Daimler, based in Stuttgart, was cautiously optimistic, saying that although the economic crisis is not over, it expects growth in especially emerging economies to help its business.

“The world economy is still in a period of transition at the beginning of 2010,” Daimler said in its report.

“There is very little hard evidence that a self-sustaining, lasting upswing has actually started. However, the ongoing solid growth of emerging markets such as China and India is exerting a positive influence.”

Despite the glum results and outlook, the company reported positive fourth quarter revenue gains compared to the third quarter in all divisions: Mercedes-Benz Cars, which includes the luxury brands Mercedes-Benz and Maybach, as well as the compact Smart brand.

Trucks, vans and buses also reported gains in revenue compared to the third quarter. Daimler is the world’s largest truckmaker with brands including Mercedes-Benz, Freightliner, and Mitsubishi-Fuso.

Daimler said it expected to increase unit sales at all the divisions in 2010. The company said the upper-premium automobile segment is likely to be stronger than the overall car market, which is perhaps oversold at the moment because of government fleet renewal schemes, known as cash-for-clunkers in the United States.

Daimler said it reduced its global employee level to 256,407 people from 273,216 at the end of 2008, to respond to the drop in demand.

The earnings follow an announcement late Wednesday renewing Chief Executive Dieter Zetsche’s contract until Dec. 31, 2013.

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