Death of The Diesel – Q3 Daimler Earnings Guidance Cut

Unsaid by Daimler is that a new EU regulation that requires on road testing of vehicles for emissions compliance has caught many makers “cycle cheating” so the calibrations have to be redone before sale. This in autoInformed’s view was entirely predictable.

Because of developments that require an increase in expenses in connection with ongoing governmental proceedings and measures in various regions on Mercedes-Benz diesel vehicles, Daimler AG cut its earnings outlook for the year 2018.

Largely affected are  Mercedes-Benz Cars and Daimler Buses divisions and for the Daimler Group. They are now running at a loss now running at a loss.

Mercedes-Benz Vans has lower unit sales due to delays in vehicle deliveries. A ruling by the European Court of Justice, requires provisions for the potential need to act on certain vehicles still operating with the previously used refrigerant R134a. Daimler Buses records decreasing demand in some markets.

These  factors significantly alter the results of operations for the third quarter. As a result, earnings are now significantly below market expectations.

Revised Daimler *EBIT for  2018

• Mercedes-Benz Cars: significantly below the prior-year leve
• Daimler Trucks: significantly above the prior-year level (unchanged)
• Mercedes-Benz Vans: significantly below the prior-year level (unchanged)
• Daimler Buses: significantly below the prior-year level
• Daimler Financial Services: in the prior year magnitude (unchanged) and
• Daimler Group: significantly below the prior-year level

Group EBIT amounts to €2,488 million (Q3 2017: €3,409 million).

Free cash flow of the industrial business for the period of January through September 2018 amounts to minus €60 million (Q3 2017: plus €5,771 million)

All the stated figures are provisional and unaudited.

*EBIT, earnings before interest and taxes, is the measure of operating profit at Daimler and other auto groups.