Daimler Trucks is likely to miss consensus estimates for sales and earnings when the German automaker’s parent reports results Feb. 18.
Daimler AG consists of Mercedes-Benz Cars & Vans, Daimler Trucks & Buses and Daimler Mobility. All three divisions contributed to improved industrial free cash flow through cost containment, cash preservation and strong fourth-quarter operating results, according to a forecast released Thursday.
All but the Truck & Bus division finished significantly above Daimler’s guidance and market expectations for the financial year 2020. Daimler Trucks laid off 900 workers in October 2019. It is not expected to shed any more positions as the company eliminates more than 10,000 companywide jobs by 2022.
Daimler AG’s 2020 results are expected to include €1.87 billion ($2.3 billion) in restructuring charges applicable to EBIT and €301 million ($365 million) affecting industrial free cash flow.
Earnings before interest and taxes (EBIT) for Daimler Trucks & Buses was €525 million ($637 million) versus the consensus of €556 million ($686 million); adjusted EBIT is forecast at €678 million ($823 million) versus a consensus of €689 million ($836 million). Projected return on sales of 2% was aligned with consensus.
Warning on semiconductor shortage
The current semiconductor shortages and COVID-19 disruptions will probably impact the first quarter 2021, the company said. It did not mention specifics. Several competitors have taken down weeks because supplies of microprocessors were redirected to consumer goods after car and truck makers curtailed production during the first wave of coronavirus last spring.
But Daimler said that based on cost discipline in the fourth quarter and expected good underlying demand, the company anticipates a positive business development in 2021.