German carmaker Daimler declined to give a detailed earnings outlook for 2009 when posting a fourth-quarter operating loss, saying only that it expected demand to fall about 10 per cent in 2009.
On top of a "pronounced decline" in all major car markets in the first half of 2009, Daimler said group vehicle sales should drop due to a substantial fall in heavy truck sales in developed markets and a weakening trend in emerging markets.
"The risk is very big that this year a loss will be made," said Metzler Bank analyst Juergen Pieper. "The expectation that the passenger car market this year contracts by only 10 per cent is too optimistic."
Morgan Stanley was also downbeat. "Consensus still expects Daimler to post a positive EBIT (earnings before interest and taxes) in 2009. The question is not if Daimler loses money in 2009, but how much," it said in a research note.
Daimler shares were down 2.1 per cent at €23.05 at 11.50am, off an earlier low at €21.815 as the shock of a disastrous fourth quarter wore off once it became clear it was due to the impact from former US unit Chrysler. The DJ Stoxx European car sector index was 3.6 per cent lower.
Daimler swung to a fourth-quarter loss before interest and tax of €1.95 billion, significantly short of the average estimate of a €250 million loss in a Reuters poll of 21 analysts.
"As revenues continue to fall, we also expect further substantial pressure on earnings, both at group level and at the individual divisions," chief executive Dieter Zetsche said.
He promised more cost-cutting but would not give a concrete 2009 profit forecast after posting fourth-quarter results that fell far short of expectations because of €2.2 billion ($2.8 billion) in Chrysler losses and other one-offs.
"In total, we anticipate potential savings in all of our divisions and at headquarters of several billion euros this year," Zetsche told reporters.
Full-year net profit slumped 65 per cent to €1.41 billion, prompting Daimler to cut its 2008 dividend to €0.60 euro, down from €2 a year ago.
Reuters