|Bid||48.15 x 124500|
|Ask||48.15 x 73800|
|Day's Range||47.22 - 48.37|
|52 Week Range||44.51 - 60.00|
|Beta (3Y Monthly)||1.35|
|PE Ratio (TTM)||7.28|
|Earnings Date||Jul 24, 2019|
|Forward Dividend & Yield||3.25 (6.83%)|
|1y Target Est||62.70|
(Bloomberg) -- Just one month into the job, Daimler AG’s new executive duo is unearthing skeletons from the diesel-scandal era, hobbling the move toward an electric future with a crisis that erupted almost four years ago.After previously promising a slight earnings gain for 2019, operating profit this year will fail to grow, Daimler said late Sunday in its third downgrade in a year. The company blamed proceedings around allegations of emissions tampering in diesel cars for the more muted outlook, which required higher provisions to account for recalls. The stock fell as much as 5.1%, almost erasing the gain that Daimler had built up since the start of the year.The more pessimistic outlook heaps pressure on Chief Executive Officer Ola Kallenius, who’s flanked by new Chief Financial Officer Harald Wilhelm, to implement their proposal to rein in costs and restore profitability, having taken over only recently from long-term CEO Dieter Zetsche. But investors say the duo’s future strategy remains light on details and lament the rapidly recurring revisions that are without precedent in the German car industry.“It all comes back to the same old fact: Daimler needs to execute better,” said Arndt Ellinghorst, an analyst in London at Evercore. “The endless array of so called ‘one-time’ effects raises questions regarding process, management information systems and ultimately accountability of management.”Ups and DownsZetsche’s own tenure of more than a dozen years had known its ups and downs, skewed toward the latter in the period before his departure. After managing to return Daimler to the top of the luxury-car pack, his last year at the helm was marked by two profit warnings and a falling stock, which ended the year down by more than a third, a considerably poorer return than its two big German rivals, BMW AG and Volkswagen AG.The German car industry is facing a litany of issues, from the costly switch to electric and self-driving cars, to the trade war between the U.S. and China that has complicated sales, because some of the biggest production sites sit in the U.S. and ship their cars to Asia.And while the diesel crisis first erupted at VW in late 2015, it has engulfed the entire industry. Days before the latest warning, Daimler suffered a fresh setback when German regulators issued a mandatory recall for about 40,000 Mercedes GLK SUVs over potentially illegal software to skirt emissions rules. A spokesman declined to comment on a connection to the profit warning.German authorities already slapped Daimler with a recall of 774,000 diesel cars in Europe last June over the use of prohibited devices regulating their emissions. The company continues to claim a clean-engine record.Corporate Culture“Clearly both the near term operational challenges and possible questions around Daimler’s corporate culture are issues that must be addressed with urgency by Daimler’s new CEO,” Dorothee Cresswell, an analyst at Barclays Equity Research, said in a June 24 note.The provision of as much as 1 billion euros may also raise questions on the sustainability of the dividend, which Daimler reduced recently, said Bloomberg Intelligence analyst Michael Dean. The company paid out 3.25 euros a share last year, down from 3.65 euros. While shares fell 4% to 47.65 euros at 2:51 p.m. in Frankfurt trading, bondholders took the third profit warning in their stride.The carmaker’s most liquid euro-denominated bonds, maturing in 2023 and 2026, are barely moving in Monday trading, based on data compiled by Bloomberg. The cost of five-year default insurance remains near its lowest level in more than a year after rising almost 2.5 basis points to 56.9 basis points, based on CBIL prices.Facing InvestigationsThe German manufacturer is facing investigations in Europe and the U.S. over allegedly excessive pollution from its diesel vehicles. Daimler has agreed to software upgrades for millions of cars in Europe, while so far escaping fines. That’s in contrast to VW, where the scandal has so far cost the world’s biggest carmaker 30 billion euros ($34 billion) in fines and provisions.Highlighting the breadth of issues, Daimler on Sunday also warned that its struggling van unit will be unprofitable this year, with a return of sales of minus 2% to minus 4%. The division slumped to a surprise loss in the first quarter as plans to produce a Mercedes-Benz pickup truck in South America fell through.For Kallenius and Wilhelm, the latest revision offers a chance to clean house ahead of a more comprehensive overhaul. Last month, shareholders approved a new corporate structure that will give its divisions for cars, trucks and mobility services more independence. While Daimler’s woes at the Mercedes-Benz cars division underscores the urgency behind the move, it could rally criticism from some investors to implement deeper changes, including a separate listing for the sprawling trucks division, a step that would mimic a move by VW.Kallenius may be new in his job, but he’s no stranger to Daimler, having worked for the company his entire professional life. Wilhelm, too, is familiar with the company, having worked at the carmaker prior to his years spent as finance chief for Airbus SE. Still, the duo may find that they’ve not reached the bottom yet in terms of financial expectations for the year, said Marc-Rene Tonn, an analyst at Warburg Research, citing a “less favorable” sales mix and supply chain constraints.“We fear that Sunday’s profit warning may not be the last for the current year,” he said.(Updates with dividend comment in 10th, bond reaction in 11th paragraph.)To contact the reporter on this story: Christoph Rauwald in Frankfurt at email@example.comTo contact the editors responsible for this story: Anthony Palazzo at firstname.lastname@example.org, Benedikt Kammel, Elisabeth BehrmannFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Daimler’s shares slipped on Monday after the German carmaker issued its third profit warning since last year because of the anticipated financial fallout of alleged manipulations of diesel emissions. It warned investors that second-quarter earnings would take a big hit as it was setting aside hundreds of millions of euros to cover a regulatory crackdown on diesel emissions, prompting a 4 per cent fall in shares by early afternoon. The hit to earnings would amount to a “high three-digit-million”, Daimler said in a regulatory statement.
Things are getting worse for German auto manufacturer Daimler after localnewspaper Bild reported that the company is recalling a further 60,000Mercedes cars
(Bloomberg Opinion) -- When Volkswagen AG admitted rigging diesel emission tests in September 2015, its German rival Daimler AG sounded pretty dismissive in defending the compliance of its own Mercedes-Benz vehicles. “We categorically deny the accusation of manipulating emission tests regarding our vehicles,” the luxury car giant said. “A defeat device, a function which illegitimately reduces emissions during testing, has never been and will never be used at Daimler. This holds true for both diesel and petrol engines. Our engines meet and adhere to every legal requirement.”If Daimler shareholders concluded from that statement that the company wouldn’t have to recall any diesel vehicles, or that it wouldn’t face any financial or legal repercussions related to its diesel emissions, they’ve been sorely disappointed. On Sunday Daimler warned of a high three-digit million euro hit to profit because of provisions for “various ongoing governmental proceedings and measures relating to diesel vehicles,” without saying what these were. Group operating profit is now expected to stagnate this year.This was Daimler’s third profit warning in 12 months and all have involved unexpected diesel costs to some extent. The shares gave up about 2 billion euros ($2.3 billion) of market value on Monday – more than twice the expected hit to profit – which suggests investors fear this won’t be the end of it.And who could blame them? On diesel, as with its own earnings forecasts, Daimler is in danger of being seen as unreliable counsel. The share price, which essentially has gone nowhere since 2007, reflects that distrust.The distinction will probably be lost on city-dwellers who breathed in poisonous diesel fumes, but to this day Daimler insists its diesels didn’t break the law. European vehicle emissions rules were loosely written. Turning down or switching off emission controls to protect the engine in certain circumstances – such as lower temperatures – was allowed and loopholes like this were widely used (and abused by the industry).So far, Daimler has escaped fines and the balance sheet damage has been limited. In contrast, VW has incurred about 30 billion euros of diesel-related costs since it confessed to cheating.Daimler has, though, recalled millions of diesel vehicles since 2015 (some voluntarily, some not) after several models were shown to have belched out far more nitrogen oxide pollution when driven on streets than when tested in the laboratory. In fairness, Mercedes is by no means the only carmaker where that’s been the case. But national regulators have at times seemed oddly reluctant to investigate or punish such large employers. Mercedes’s latest recall came over the weekend when thousands of GLK diesel SUVs were called back to the garage because of software that the regulator said potentially distorted test results.The legal risks section of Daimler’s annual report discusses the various diesel-related troubles at some length. The legalese makes it hard to follow but there’s no hiding the fact that Daimler is facing trouble on more than one continent: Stuttgart prosecutors have opened a criminal investigation on suspicion of fraud and false advertising; the German regulator KBA has said the company used “impermissible defeat devices;” and the U.S. Department of Justice has asked Daimler to conduct an internal investigation. Meanwhile, the company faces class actions and other lawsuits over allegations of excessive diesel emissions and false advertising, which Daimler denies.The car giant has a new chief executive and new chief financial officer (Ola Kaellenius and Harald Wilhelm) and therefore a rare opportunity for a fresh start. Getting to grips with the diesel problems, and communicating about them more transparently, needs to be a top priority.There’s a danger it will become a millstone instead. Daimler has invested heavily in a new diesel engines and recent tests have shown them to be relatively clean. Selling lots of those vehicles would help lower the carbon dioxide emissions of the Mercedes fleet and thus avoid regulatory fines. However, another barrage of negative diesel headlines won’t help reassure a still skeptical car-buying public. Unfortunately for Daimler, there is also nothing it can do to speed up or resolve the various litigation proceedings and investigations.At a time when heavy spending on electric and autonomous driving technology is putting pressure on Daimler’s cash flow, unexpected diesel costs are the last thing it needs. No wonder it’s been so vocal about the need to cut costs. Mercedes-Benz’s corporate slogan is “the best or nothing.” Right now it feels like the latter. To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
U.S. stock futures were higher on Monday, following a third consecutive weekly gain for the three major Wall Street benchmarks, as investors looked to the upcoming G-20 summit in Osaka, Japan, for a breakthrough in U.S.-China trade talks. China's state-run Xinhua news agency confirmed for the first time Sunday that President Xi Jinping will attend the two-day summit, which begins Friday, and is expected to meet with his counterpart Donald Trump for the first time since trade talks broke down in early May and after the U.S. increased tariffs on China-made imports.
shares traded sharply lower in Frankfurt Monday after the luxury automaker issued a surprise 2019 profit warning linked to the increased cost of meeting European and global emissions standards. Daimler said it now sees second quarter earnings coming in around the same levels as last year, down from a previous forecast of a modest advance, and expects profits for the full 2019 year to be "in the magnitude of the previous year". The profit warning followed a Sunday announcement that Daimler will need to recall 60,000 diesel-powered Mercedes vehicles after German regulators found them to be fitted with software that could distort emissions tests.
US stocks finished in the red on Monday after news of the Trump administration’s new sanctions on Iran wore down a positive start to the session that came courtesy of technology stocks. Late in the morning session, President Donald Trump said he was signing an executive order that would impose “hard-hitting” economic sanctions on Iran, and added that the US would “continue to increase pressure on Tehran”.
Weak German economic data and a profit warning from Daimler weakened European stock markets on Monday as investors reined in any bets on a fourth week of gains before G20 meetings that may see more trade talks between the U.S. and Chinese presidents. The main European index has shown signs of flagging in the past week after recouping almost all of its losses from a sharp sell-off in May, helped by expectations of more monetary stimulus globally. Corporate newsflow continues to point to a slowdown in growth and Mercedes-Benz maker Daimler dropped 3.8% after it cut its 2019 earnings outlook and lifted provisions for issues related to its diesel vehicles by hundreds of millions of euros.
The company said in a news release that it would be hit by “a high three-digit million” euro increase in charges related to ongoing government proceedings and measures related to diesel vehicles.
In the third profit warning since 2018, Daimler warned shareholders that it now expects earnings before interest and taxes to be similar to last year’s level of €11.1bn, compared with the previous guidance of a “slightly higher” ebit. Shares in Daimler opened down 3.5 per cent on Monday morning. The profit warning comes at a highly politically sensitive moment as new Daimler chief executive Ola Källenius and the bosses of his German rivals will meet Chancellor Angela Merkel and other senior politicians on Monday in Berlin to discuss the future of the German car industry and the transition to electric vehicles.
A profit warning from Mercedes-Benz maker Daimler dampened European stock markets early on Monday, as investors looked for direction to a keenly awaited G20 summit this week that brings U.S. and Chinese leaders together after a long lull in talks. Daimler AG's shares dropped 3% after it cut its 2019 earnings outlook on Sunday and lifted provisions for issues related to its diesel vehicles by hundreds of millions of euros. The pan-European STOXX 600 index was down around 0.2% by 0706 GMT.
Ola Källenius, the new Daimler chief executive, must have packed a large broom when he moved into the role in May. The company’s decision to raise diesel-related provisions by up to €800m in the second quarter will leave group profits flat for the year. comes after German authorities accused Daimler of emission cheating. Daimler denies the charge.
● MorphoSys of Germany led the Stoxx 600 gainers after the antibody developer delivered promising headline results of a pivotal Phase 2 clinical trial of its tafasitamab drug for treating lymphoma. Goldman Sachs analysts said they were increasingly comfortable with expectations that the US Food and Drug Administration would approve tafasitamab on the basis of the L-MIND trial alone. ● Daimler was the worst performer among Europe’s auto stocks after a profit warning.
Daimler shares fell as much as 5% on Monday after the German automaker cut its profit forecast for the third time in 12 months, saying it was setting aside hundreds of millions of euros to cover a regulatory crackdown on diesel emissions. The warning - that group operating profit would be flat this year compared with previous expectations for a slight increase - was the first under new chief executive Ola Kaellenius and led some analysts to call for a fresh approach from his team. Carmakers have been grappling with a crackdown on diesel emissions since 2015, when German rival Volkswagen admitted to cheating U.S. pollution tests on diesel engines.
Daimler must recall 60,000 Mercedes diesel cars in Germany after regulators found that they were fitted with software aimed at distorting emissions tests, the Transportation Ministry said on Saturday. Daimler confirmed that the recall was ordered on Friday but said that it would appeal against the decision while continuing to cooperate with regulators. Daimler has ordered the recall of 3 million vehicles to fix excess emissions coming from their diesel engines.
is proving why it's one of the leaders in the autonomous driving movement. As Nvidia CEO Jensen Huang explained on a media conference call on Tuesday, the deal is the company's first end-to-end A.I. development, simulation and in-car partnership.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Volkswagen AG’s plan to list its truck division later this month will test whether it can pull off a feat that was once unthinkable for the German automotive giant: get smaller.For decades, the world’s biggest carmaker only knew how to expand -- adding Bentley luxury cruisers, Ducati racing bikes and Scania heavy trucks while taking its network of factories well past the 100 mark and its headcount over 640,000.Even in the face of the debilitating diesel-cheating scandal in 2015, the manufacturer didn’t trim its portfolio, bolstering investment in electric cars instead and even creating a new division for mobility services.Now with the pace of change in the auto industry quickening, Volkswagen is trying its hand at trimming the empire.If the listing of a minority stake in Traton SE -- a truck and bus maker with three vehicle brands and valued at as much as 16.5 billion euros ($18.5 billion)-- goes well, it would give Chief Executive Officer Herbert Diess more sway to balance the often diverging interests of VW shareholders including the Porsche and Piech owner family, Lower Saxony and powerful labor unions.Healthy Valuation“Traton’s IPO pricing suggests a healthy valuation which puts a spotlight on VW’s significant sum-of-its-parts disconnect,” RBC Capital Markets analyst Tom Narayan said in a note. Concerns over the company’s ability to switch to electric vehicles is “unfairly” weighing on its share price, the analyst said.Volkswagen rose 0.2% to 141.42 euros at 11:46 a.m. in Frankfurt trading, taking gains this year to 1.8%.For now, Diess is seeking deeper technology partnerships and the possible sale of assets like transmission maker Renk AG and MAN Energy Solutions, which develops engines. A successful Traton listing, targeted for June 28, could even spark rival Daimler AG to follow suit with a carve-out of its own truck business.The truck group comprises three main assets, Scania, MAN and Volkswagen-branded budget trucks sold in South America and Africa, as well as a unit offering digital services to fleet operators. With 29 production and assembly sites globally, the business last year sold 223,000 vehicles. While that’s 14% more than a year earlier, it’s less than half of Daimler’s truck division, the world’s biggest.Volkswagen is offering 50 million Traton shares at 27 euros to 33 euros apiece, plus a possible over-allotment of 7.5 million shares, meaning at the top end of the price range, the sale would raise as much as 1.9 billion euros. Here are the key points in one of the biggest initial public offerings in Europe this year:Sales PitchTraton is looking to woo investors by combining the best-in-class technology and strong margins of the Scania unit with the prospect of a turnaround at MAN and growth potential in key markets, according to company presentations and research from advising banks seen by Bloomberg.The plan includes the following four pillars:StrengthsChief Executive Officer Andreas Renschler, 61, is the mastermind behind Traton. After helping to establish Daimler’s commercial vehicles business as the world’s largest, he was lured to Volkswagen in 2014. Despite the partly overlapping operations, he’s improved earnings over the past four years, mainly by enforcing closer cooperation between long-standing rivals Scania and MAN. Investor interest in Traton will largely be a bet on Renschler’s veteran skills to deliver in the cyclical truck market.The timing of the listing, which was delayed earlier this year, is complicated by global volatility. The window may be as good as it gets. Rival Volvo Group -- the main pure-play competitor -- has gained 26% this year.“It’s no secret that the market environment is very volatile,” VW Chief Financial Officer Frank Witter told reporters on Monday. “It’s not ideal, but it’s not bad either.”VW remains open to sell more Traton stock at a later stage, up to a maximum stake of 24.9%, if market conditions are supportive, he said.WeaknessesTraton has only small bridgeheads in the key North American and Chinese markets, and the prospects for expanding those positions face obstacles.In North America -- the truck industry’s largest profit pool -- Traton merely owns a 16.8% shareholding in Navistar International Corp., which doesn’t it allow it to do much. Lifting the stake will cost money and add complexity. Meanwhile, Navistar still faces fierce competition from market leaders -- Daimler’s Freightliner, Volvo’s Mack and Paccar Inc.While Daimler and Volvo have functioning production joint ventures in China, the world’s biggest truck market, Traton’s cooperation with Sinotruk Hong Kong Ltd., where its holds a 25% stake through MAN, has yet to deliver the hoped-for results.Alliances can fall short of aspirations to create economies of scale, with the recent tensions at the Renault-Nissan Alliance a fresh reminder of the difficulties in uniting separate cultures. Traton also has a cooperation with Hino Motors Ltd., a Toyota Group company, on electric technology, product development and purchasing.MAN has long attempted a turnaround, but improvements have been tepid compared to an aggressive restructuring at Volvo that doubled margins within roughly three years. MAN’s production footprint in high-cost Germany and a lineup that includes less-profitable medium-duty trucks limits the potential for improvement.(Updates with CFO comment in 14th paragraph.)To contact the reporter on this story: Christoph Rauwald in Frankfurt at email@example.comTo contact the editors responsible for this story: Anthony Palazzo at firstname.lastname@example.org, Chris Reiter, Elisabeth BehrmannFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
European lithium projects are making a fresh push for capital, eager to supply the white metal to a burgeoning network of battery manufacturers and electric vehicle makers across the continent, the world's second-largest EV market after China. A regional EV supply chain would help achieve European Union goals to lower carbon emissions, cut fossil fuel consumption and strengthen the ability of the continent's automakers and battery makers to compete with Asian rivals CATL, LG Chem and Samsung. "I'm pretty impressed by what I see being built out for an electric vehicle supply chain in Europe," Chris Berry, an independent lithium analyst, said on the sidelines of this week's Fastmarkets Lithium Supply and Markets Conference in Santiago, the industry's largest annual gathering.
The Swiss bank and its chief economist, Paul Donovan, had previously apologized for the comment, saying it was “innocently intended.” Donovan, in a discussion of the rise in Chinese consumer prices that was mainly due to sick pigs, had asked whether that mattered. “It matters if you are a Chinese pig. It matters if you like eating pork in China,” he said in the UBS Morning Audio Comment.
Every 400 basis point change in U.K. rideshare adjusted net revenue would result in a $100 million hit to Uber’s 2020 profit, analysts led by Brian Nowak wrote in a note on Thursday. The analysts noted that the “headlines may be worse than the reality,” as it’s still unclear exactly how much funding the new entrants will have, and how quickly users will adopt the rival applications. Uber has had some success in fighting off competition in countries like Brazil, they said.
Rival proposals for European patent guidelines covering technology vital for building self-driving cars and internet-linked vehicles have set tech firms and carmakers on a collision course. The differences between firms such as Qualcomm and Nokia and vehicle manufacturers like BMW and Daimler over patent terms raises the prospect of legal challenges and antitrust suits, which have emerged in other industries that depend on access to technology. In May, a U.S. court told Qualcomm to overhaul its business practices for illegally suppressing competition in the smartphone chip market by threatening to cut off supplies and extracting excessive licensing fees.