The second quarter earnings season got underway on Monday, with Daimler AG (OTC: DDAIF) unexpectedly releasing numbers showing its adjusted earnings in the second quarter of the year are “significantly above market expectations” – but the news did not carry over into its truck operations.
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Daimler AG rose the most in three weeks after the company solidified its lead in the luxury-car market and said it’s confident of reaching this year’s underlying profit goals, despite more than 1 billion euros ($1.1 billion) in one-time costs in the second quarter.
Daimler increased 4.5 percent, the most because June 20, to 57.71 ($64) euros at 10:28 a.m.in Frankfurt.
Van and bus sales were the major reason why Daimler Group’s operating income turned out to surpass expectations: Mercedes-Benz Vans’ operating income grew from 238 million euro to 462 million euro. Audi’s global registrations rose 5.6 percent to 902,272. The company also said it booked 440 million euros in special expenses linked to Takata airbag recalls as well as 400 million euros in costs related to legal proceedings, without however providing further explanations on the “reconciliation” outgoings.
Group EBIT adjusted for special reporting items for the second-quarter rose to 3.973 billion euros from last year’s 3.764 billion euros.
Investors will quiz the company about the unexplained legal costs, said Arndt Ellinghorst, a London-based analyst with Evercore ISI.
Daimler’s legal challenges include a lawsuit in the USA claiming that its BlueTec diesel vehicles violate clean-air standards when run at cooler temperatures. All other divisions (Mercedes-Benz cars, Mercedes-Benz vans, Daimler buses and Daimler Financial Services) are expected to be either slightly better or significantly better than the prior year levels.
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Daimler is scheduled to publish full quarterly results on July 21.
