Daimler bounces back to profit in 2010

STUTTGART: German luxury car maker Daimler shot back to profit last year after massive 2009 losses on a rebound in major markets and successful efforts to improve efficiency, it said Wednesday.

Daimler, which owns the Mercedes-Benz brand and is the world's leading maker of heavy trucks, posted a net profit of 4.7 billion euros ($6.3 billion) for 2010, more than reversing a 2009 loss of 2.6 billion euros.

The group turned a 2009 fourth quarter loss of 352 million euros into a 1.1 billion euro profit in the last three months of 2010 and will propose a dividend of 1.85 euros per share, a statement said.

Daimler did not pay a dividend in 2009 but investors were unimpressed by the group's upbeat tone this time around and its shares plummeted in midday Frankfurt trading, although profit-taking might explain part of the sell-off.

"Daimler managed an excellent comeback last year," chairman Dieter Zetsche said in the statement.

"Our goal now is to maintain the level we have reached over the long term and to further improve it wherever possible," he added.

It benefitted last year from special items that included the sale of a stake in Tata Motors of India which added 265 million euros to the bottom line.

Daimler also took a charge of 237 million euros in connection with the stumbling Airbus A440M military transport plane owing to the automaker's stake in Airbus' parent company EADS.

The German car maker said core earnings soared to 7.27 billion euros from an operating loss of 1.5 billion euros a year earlier.

That was better than its own forecast of 7.0 billion euros but undershot analysts expectations for 7.7 billion euros, Dow Jones Newswires reported.

Daimler now expects core earnings this year "to surpass the level of 2010 significantly," the statement said.

It also "assumes that its total unit sales will rise and that revenue will grow at a more moderate rate in 2011."

The group benefitted from a recovery of all its major markets last year as well as from a programme to increase production efficiency.

It sold 1.9 million vehicles with group revenue up 24 percent to 97.8 billion euros, thanks notably to rising Mercedes deliveries in China and the United States.

Daimler staff, which totaled 260,100 as of December 31, are to receive a special bonus of 3,150 euros as a result of the group's strong performance.

Shares in the group were hammered in midday trading on the Frankfurt stock exchange, showing a loss of 2.89 percent to 54.36 euros, while the DAX index of German blue-chips was 0.14 percent higher overall.

Auto analyst Frank Schwope at NordLB bank said "the market might have been a little disappointed by the fourth quarter but I find the reaction overdone, especially since the outlook is excellent.

"It might also be the result of profit-taking because the share has gained a lot of ground recently," he added.