Daimler AG reported its fourth-quarter and full-year earnings were up over the previous year due in large measure to strong sales from its Mercedes-Benz luxury car division.
“2015 was a good year for Daimler,” CEO Dieter Zetsche said in the statement. “Getting to the top is hard, but staying at the top is even harder. That’s our ambition.”
The company’s fourth-quarter earnings before interest and tax rose 22% to $3.8 billion and its revenue jumped 13% to $45.3 billion. For the full year, EBIT increased to $15.5 billion: a jump of 36%.
Much of that came from the aforementioned car business, which saw a 23% jump in earnings. The car unit’s margins rose to 10% in 2015 from 8.1% a year earlier, while net profit was $9.9 billion, up from $8.2 billion.
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The end result is more cash for investors and workers as it raised its to $3.60 per share, from $2.75. Daimler is also doling out profit-sharing checks for $6,215 for each of the 125,000 eligible workers in Germany. It’s an increase over last year’s payouts of just under $4,900 each.
Zetsche’s strategy of bolstering the car company’s sales – and overtaking BMW for the global luxury car sales lead by 2020 – appears to be adding significant cash to the company’s coffers in the process.
There was a downside for Daimler. The full-year results were very good, but fourth-quarter earnings missed analyst estimates and the company issued a cautious outlook for 2016, saying that operating profits would only “increase slightly.”
A similarly tepid assessment was offered up for prospects in China as well.
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“The growth rate in China will be more moderate this year,” the company said.
This comes as Mercedes posted an impressive result in the country last year with sales rising 33 percent to 373,459 vehicles last year. It’s all the more impressive when it’s noted that the Chinese auto market was at its slowest level of growth in three years: 4.7%.
Zetsche was quick to suggest that interpreting their assessment of the market this year as disappointing would be a mistake.
“We look positively into the year in China. The market forecast is for 8% growth and we believe we can achieve market share gains,” he said.
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It should be noted that Daimler had been well behind most of its competition in China, which explains in some measure the significant sales jump in 2015. China, known for its love of luxury vehicles, gobbled up C class and GLA compact cars the company was building in Beijing.