|Bid||0.00 x 250000|
|Ask||0.00 x 250000|
|Day's range||45.40 - 45.99|
|52-week range||44.54 - 59.99|
|Beta (3Y monthly)||1.30|
|PE ratio (TTM)||6.88|
|Forward dividend & yield||3.25 (7.14%)|
|1y target est||N/A|
(Bloomberg) -- A major supplier of automotive seats joined the largest luxury-car maker in cutting its earnings forecasts as weak sales in the world’s biggest markets darkens the outlook for the industry.Lear Corp. warned investors Tuesday that net sales may drop to as low as $19.8 billion this year, down from an earlier projection of as much as $21.7 billion. The supplier of seats and electrical systems followed Mercedes-Benz maker Daimler AG in dialing back its earnings outlook, saying a second-half rebound in industry production volumes may no longer be in the cards.“We now believe general macroeconomic and industry factors will continue to put pressure on sales and earnings throughout the remainder of 2019,” Ray Scott, Lear’s chief executive officer, said in a statement.Analysts have slashed estimates for auto sales this year in China, which is going through the first slump in a generation. Carmakers are cushioning declines in the U.S. by delivering more vehicles to rental companies and other fleet customers. More consumers have been getting priced out of the market by higher financing costs and automakers’ culling of slow-selling sedans from their lineups.“It is fair to say we don’t know anyone who feared that a Lear guide down could be this bad,” Chris McNally, an analyst at Evercore ISI, wrote in a report Tuesday.Lear shares opened down as much as 7.4%, the biggest intraday plunge since November 2016. The stock was down 2.9% to $131.30 as of 11 a.m. in New York.\--With assistance from Keith Naughton.To contact the reporter on this story: Kyle Lahucik in Southfield at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Trudell at email@example.com, Chester DawsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
* STOXX 600 flat, set for 1st weekly drop since late May * DAX (+0.1%) lags after China trade data, Daimler warning * Daimler falls slightly after profit alert, but peers rally * Autos, Miners, chemical sector leads gains Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Josephine Mason. "We believe we could see further cash/earnings risks as management's strategy and the levels of investment required to achieve their aims becomes clear." Credit Suisse says there remains a debate whether the latest warning reflects a deteriorating business or a kitchen sinking by the new management.
* STOXX 600 up 0.2%, set for 1st weekly drop since late May * DAX (+0.1%) lags after China trade data, Daimler warning * Daimler falls slightly after profit alert, but peers rally * Autos, Miners, chemical sector leads gains Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Josephine Mason. Reach her on Messenger to share your thoughts on market moves: firstname.lastname@example.org DAIMLER: THAT "KITCHEN SINKING" FEELING (1336 GMT) All auto stocks are having a surprisingly strong day. "We believe we could see further cash/earnings risks as management's strategy and the levels of investment required to achieve their aims becomes clear." Credit Suisse says there remains a debate whether the latest warning reflects a deteriorating business or a kitchen sinking by the new management.
(Bloomberg) -- Barely three weeks ago, Daimler AG dialed back profit expectations for the year. The move was seen as a housekeeping exercise to allow Chief Executive Officer Ola Kallenius to start with a clean slate.But on Friday, the Mercedes-Benz maker cut its earnings outlook again -- the fourth warning in just over a year -- suggesting an alarming degree of disarray at the world’s biggest producer of luxury cars at a time when slowing sales and huge investments in new technology are testing the industry.Daimler now sees earnings before some items falling “significantly” below last year’s level, and said second-quarter results had swung to a loss of 1.6 billion euros ($1.8 billion) from a profit of 2.6 billion euros. It blamed provisions for vehicle recalls to fix defective airbags and a need to set aside more money to deal with long-running allegations of diesel-emissions tampering.“Some call it ‘to throw in the kitchen sink,’’’ Evercore analyst Arndt Ellinghorst said in a note, referring to the practice of dumping all the bad news into a single quarter’s results. “Well, Daimler just threw in the dining room table, the fridge and the polished silver.”While issues with airbags from Japan’s Takata started years ago, involving faulty inflators that propelled deadly shrapnel during accidents, Daimler said it discovered new potential issues during laboratory tests and decided to set aside 1 billion euros for a precautionary recall. Facing criticism of a piece-meal response to its handling of the diesel allegations, the company also increased provisions by 1.6 billion euros as fallout from investigations and legal expenses looms.The shares fell as much as 4.5% in Frankfurt, before recovering most of their losses to trade 1% lower at 46.19 euros by 1:13 p.m. Insurance contracts on the company’s debt are the worst performers in the iTraxx Europe index of credit-default swaps early Friday.Aside from one-offs on airbags and diesel, Daimler warned of slower markets and troubles with the rollout of several of its models, adding to a sense of gloom for the carmaker that took the luxury sales crown from BMW AG in 2016 with an overhauled lineup of sporty sedans and sport utility vehicles.Daimler’s latest profit warning didn’t allay concern the carmaker might cut again, according to Jefferies analyst Philippe Houchois, who said its dividend was now “unsustainable” and cut expectations to just 50 cents. Daimler last year paid a reduced dividend of 3.25 euros.The more pessimistic outlook heaps pressure on Kallenius, who’s flanked by new Chief Financial Officer Harald Wilhelm, to implement proposals to cut costs and restore profitability. Investors have said the duo’s strategy remains light on details as the carmaker buckles under recurring revisions that are without precedent in the German car industry. The warning also makes uncomfortable reading for former CEO Dieter Zetsche, leading Daimler for 13 years, who’s set to segue to the supervisory board in 2021.Still, some observers said it makes sense for the new CEO to clean up the problems left over from the previous leadership before attempting to put his own imprint on the company.“It’s better to issue a profit warning now and rebase expectations before he comes up with an updated strategy later this year,” said Daniel Schwarz, an analyst at Credit Suisse.While other carmakers and their suppliers have also warned of deteriorating results, Daimler appears worse hit. BASF SE, the world’s largest chemical maker, last week fired a warning shot across industries with its reduced outlook, blaming slowing markets and the impact of the U.S.-China trade war. Returns at Daimler’s core Mercedes-Benz cars division are expected to drop to between 3% and 5%, down from 6% to 8%, it said Friday.Daimler’s latest in a string of bad news sits uncomfortably next to an announcement by Volkswagen AG and Ford Motor Co. due later Friday that’ll set a new bar on cooperation and cost reduction. The world’s biggest and sixth-largest carmakers will team up on electric cars and autonomous driving to tackle the unprecedented shifts. It’s the second win for VW’s CEO Herbert Diess, who’s making headway overcoming internal strife to overhaul the 12-brand behemoth to also list VW’s truck unit Traton SE last month.“Premium carmakers -- BMW and Audi too -- are struggling to go with the new times and wave goodbye to the glory days,” said Juergen Piper, an analyst at Bankhaus Metzler. “But no one is struggling as much as Daimler.”\--With assistance from Christoph Rauwald, Stefan Nicola and Hannah Benjamin.To contact the reporter on this story: Elisabeth Behrmann in Munich at email@example.comTo contact the editors responsible for this story: Anthony Palazzo at firstname.lastname@example.org, Frank ConnellyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Profit warnings are never pleasant but few are as comprehensively horrible as the one Daimler AG served up on Friday. If the German car giant’s intention was to convince the investment community that it doesn’t have a grip on its business or earnings forecasts, then well played. Mission accomplished.Usually a warning that spans product recall costs, legal issues, production delays and weak demand might be excused as “kitchen-sinking” (getting all of your bad news out at once). Ola Kaellenius took over as chief executive from Dieter Zetsche in May and a change at the top is often a good moment to reset investor expectations.But this is Daimler’s fourth profit warning in barely 12 months, and the last one came less than three weeks ago. It had already chucked out the kitchen sink; now’s it’s moved on to tearing out the plumbing. On top of the problems disclosed by Daimler in the last warning, the company has now revealed several massive new burdens on earnings, which are related chiefly to the fallout from allegations of emissions tampering in diesel cars. I wrote before about the legal risks that Daimler faces. The upshot is that the German giant made a 1.6 billion euro ($1.8 billion) operating loss in the second quarter and full-year profit is now expected to be “significantly” below last year’s. The Mercedes-Benz division will probably eke out a return on sales of just 4% this year (the midpoint of its expected range). For a premium auto manufacturer, that’s abysmal. The French mass-market carmaker Peugeot SA achieved double that recently. Oddly, Daimler shares gave up less than 1 billion euros of market value on Friday, which suggests investors were expecting more bad news. Also, some of the new problems are one-offs. Still, the fall propelled Daimler’s dividend yield – the last dividend divided by the share price – toward 7%. That’s not a sign of faith from the markets.Daimler distributed 40% of its net profit to shareholders last year, which means it paid out almost 3.5 billion euros. It’s reasonable to assume 2019’s net profit will be lower than last year and that the dividend will be too. The Bloomberg Dividend Forecast anticipates a payout of 2.65 euros a share, a cut of almost one-fifth. With Daimler’s cash flow under severe pressure, even that looks generous. 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.
Luxury carmaker Daimler cut its profit forecast for the fourth time in 13 months on Friday, as it set aside more money to cover a regulatory crackdown on diesel emissions and vehicle recalls related to Takata airbags. The German automaker is among a raft of blue-chip firms to issue a profit warning this week, adding to concerns about the severity of an economic slowdown, particularly in China where confidence has been hit by an ongoing trade war. The maker of Mercedes-Benz cars said it would post a second-quarter operating loss and that 2019 results would be "significantly" lower than last year, compared with its previous forecast for a broadly unchanged performance.
(Bloomberg) -- A long history of failed automotive mergers and tie-ups -- from Daimler-Chrysler, to GM-Fiat and BMW-Rover -- used to be reason to doubt that combinations or partnerships between big carmakers were a good idea.But as the world’s biggest manufacturers anticipate an age of increasingly electric, autonomous and shared vehicles, they’re increasingly becoming bedfellows.Volkswagen AG and Ford Motor Co. have scheduled a press conference in New York on Friday after months of talks about joining forces to develop self-driving and electric vehicles. Aligning with one another in the burgeoning fields would build on an existing partnership to work together on commercial vans and trucks.The expanding alliance between the world’s No. 1 and America’s No. 2 car companies is only the latest example of the auto industry giants joining forces to cope with the transformation sweeping their industry. The transition is going to be costly: Since 2010, more than $14 billion has been invested in autonomy and mobility technologies, according to BloombergNEF.“BMW and Daimler are pairing up and matching up on their autonomous-vehicle program, as are Toyota and Uber, and you’ve seen GM and Honda, and now VW and Ford,” said Mike Ramsey, an automotive consultant at Gartner Inc. “That leaves Hyundai and Kia hunting around desperately for partners. And then the remainder, like FCA and PSA.”Here’s a rundown of some of the most noteworthy tie-ups of the last few years among the world’s leading automakers:BMW-Daimler DealsBMW AG and Daimler AG vowed earlier this month to team up on developing cars capable of traversing highways without human intervention starting in 2024. While drivers will remain behind the wheel, the companies said their vehicles will be able to navigate highways and park on their own.The luxury-auto arch rivals also agreed to pour more than 1 billion euros ($1.1 billion) into the car-sharing and ride-hailing businesses they combined to form one joint venture earlier this year to compete with the likes of Uber Technologies Inc. and Lyft Inc.Fiat’s Renault FlirtationFiat Chrysler Automobiles NV -- already an Italian-American amalgam -- pursued a merger with Renault SA earlier this year, though the potential deal abruptly collapsed last month due to the French state’s intervention and concern about the implications for Renault’s existing alliance with Nissan Motor Co. and Mitsubishi Motors Corp.Still, it may be too soon to write off the idea. Renault and French Finance Minister Bruno Le Maire have said talks with Fiat Chrysler could resume once the Renault-Nissan alliance is on firmer footing. Fiat Chrysler Chairman John Elkann told Italian newspaper La Stampa this week called the attempt to merge with Renault an “act of courage.”BMW’s Other BlocsNearly two years before Fiat Chrysler’s merger proposal with Renault, the company entered a coalition led by BMW that’s creating an autonomous-vehicle platform slated to be launched in 2021. Other members of the collaboration include Intel Corp., Aptiv Plc, Continental AG and Magna International Inc.And that’s not all for BMW. Jaguar Land Rover announced in June it will team up with the German automaker to work on its fifth generation of electric-drive technology, which is set to roll out next year with an electric X3 crossover.Daimler Joining GeelyDaimler decided earlier this year to transform Smart, its struggling small-car division, into an all-electric brand rooted in China with the help of its largest shareholder, Zhejiang Geely Holding Group.The two groups also agreed last October to enter China’s ride-hailing and car-sharing business by forming a 50-50 venture. They plan to levereage models including the Mercedes-Benz S-Class and E-Class and the ultra-luxury brand Maybach to battle market leader Didi Chuxing.Honda Hitching RidesEven Honda Motor Co. has pivoted from the go-it-alone approach that it stuck to for decades. The Japanese automaker joined an existing venture between Toyota Motor Corp. and SoftBank Group Corp. earlier this year.Last fall, Honda committed to investing $2.75 billion in General Motors Co.’s Cruise self-driving unit. The two already were working together on electric-vehicle batteries and hydrogen fuel cell systems.Toyota’s Electric-Car CooperationToyota, whose battery-powered RAV4 partnership with Tesla Inc. ended up being a short-lived clash of polar-opposite business cultures, entered another electric-vehicle alliance in 2017 with Mazda Motor Corp.Months after announcing the Mazda pact, Toyota added Suzuki Motor Corp. to the mix, with the two saying they plan to bring electric vehicles to China and India beginning in 2020. And in June, Toyota added Subaru Corp. to its stable of EV partners.\--With assistance from Keith Naughton.To contact the reporter on this story: Kyle Lahucik in Southfield at email@example.comTo contact the editor responsible for this story: Craig Trudell at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
This BMW/Daimler partnership includes developing automated drivingtechnologies that precede Level 4, too, including advanced driver assistancefeatures like smart cruise control and automated parking
Some 1,200 developers at BMW and Daimler will team up to develop automated driving technology, the companies said on Thursday, the latest carmakers forced to pool their development resources at a time of shrinking margins. The strategic partnership will focus on developing technologies for assisted driving systems, automated driving on highways and automated parking, BMW and Daimler said in a statement, adding that the two companies will implement the technologies in their cars independently. The two carmakers first announced their plans to join forces on automated driving technology in February, saying they were discussing the possibility of extending their partnership.
(Bloomberg) -- BMW AG more than doubled its U.S. sales lead over Daimler AG’s Mercedes-Benz in June with a strong performance from its fresher line of SUVs.Deliveries jumped 7.5% last month to 31,627, paced by the diminutive X3 crossover and three-row X7 sport utility vehicle. BMW sales rose 2% at the half-year mark, building a lead over Mercedes of more than 9,000 units.Sales for Mercedes, which held the luxury crown the past three years, were little changed in June from a year ago at 26,196 units, leaving the Daimler division down 7.2% in the first half. Deliveries plunged more than 30% for both the C-Class sedan and GLS crossover.Toyota Motor Corp.’s Lexus deliveries slipped 3% in June, leaving the brand up 0.5% year-to-date. The ES sedan was the only high-volume Lexus model to gain in June.(Corrects BMW percent change at half-year mark in second paragraph.)To contact the reporter on this story: Gabrielle Coppola in New York at email@example.comTo contact the editors responsible for this story: Craig Trudell at firstname.lastname@example.org, Melinda GrenierFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Share's of German automaker Daimler fell almost 4% in Monday trading after the company said Sunday that profits for the second quarter would be hurt by troubles from its Mercedes-Benz brand and downgraded its earnings forecast for the the full year.
* European shares down 0.3% amid worries about Middle East tensions, nerves ahead of G20 * Daimler's profit warning sends autos stock lower, STOXX autos index -1.2% * German business morale falls again in June * FTSE lone riser among European bourses Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Thyagaraju Adinarayan. Reach him on Messenger to share your thoughts on market moves: rm://email@example.com CLOSING SNAPSHOT: EUROPE STRUGGLES AS CARS GO INTO REVERSE (1604 GMT) European stocks have struggled to hold their ground today as investors moved to the sidelines in a broadly risk-off day, which is likely to be the theme for the week ahead of the much-anticipated meeting between Presidents Xi and Trump at the G20 summit at the weekend.
The fallout from over-producing diesel vehicles has continued to haunt automobile giant Daimler, after it was forced to lower profit expectations again. Shares of Mercedes-Benz's manufacturer dropped as much as 4.5% today after the company issued its third downgrade this financial year. German rivals Volkswagen and BMW were also hit.
(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 firstname.lastname@example.orgTo contact the editors responsible for this story: Anthony Palazzo at email@example.com, Benedikt Kammel, Elisabeth BehrmannFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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 firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis 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.
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.
Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Thyagaraju Adinarayan. Reach him on Messenger to share your thoughts on market moves: rm://firstname.lastname@example.org OPENING SNAPSHOT: CARS SKID, RETAILERS RISE, NATIXIS OFF LOWS (0732 GMT) Most of the European indices open higher, but Germany's DAX is underperforming hit by falling auto stocks. Mercedes-Benz maker Daimler is sliding 3% after it cut full-year profit expectations and peers BMW and VW are down 1%.
Up 4% so far in June, the pan-European STOXX 600 index closed 0.25% lower on the day, with most of its major component markets in the red, led by a 0.5% dip in Frankfurt's DAX. 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.
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.
Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Thyagaraju Adinarayan. Reach him on Messenger to share your thoughts on market moves: rm://email@example.com ON OUR RADAR: CARMAKERS, NATIXIS, METRO (0647 GMT) Futures point to flat to slightly higher open for European stocks with DAX lagging others as a profit warning by Daimler casts a shadow on German auto stocks. Daimler slides 6% in premarket after the Mercedes-Benz maker cut profit expectations as it set aside more money for issues related to its diesel vehicles.