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Daimler, Honda slump following earnings reports

Posted Oct 28th 2009 3:15PM by Trey ThoelckeTrey Thoelcke RSS Feed
Filed under: Earnings reports, Daimler (DAI)

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Tuesday, Daimler AG (NYSE: DAI) reported that it returned to profitability in the third quarter of 2009, and Honda Motor Co. Ltd. (NYSE: HMC) posted much lower fiscal second quarter earnings, but which were better than the loss the company had earlier expected.

In line with previously released preliminary results, Daimler posted a net profit of 56 million euros ($83.2 million), or 0.04 euros per share, down from 213 million euros ($316.5 million) in the same quarter of 2008. And it said revenue fell to 19.3 billion euros ($28.7 billion) from 24.5 billion ($36.4 billion) a year ago. The slump in sales was most substantial in its Daimler Trucks and Mercedes-Benz Vans units.

Daimler also warned that it anticipates significant decreases in unit sales and revenue in full-year 2009. The company has taken measures to reduce fixed and material costs, reduce labor costs, and streamline organizational structures, resulting in increased free cash flow in the first three quarters of the year. Daimler expects its sound financial position to remain stable during the fourth quarter.

For the three months that ended in September, Honda's net income fell 56.2% from a year ago to 54.0 billion yen ($599 million), or 29.78 yen ($0.33) per share. Revenue totaled 2,056.6 billion yen ($22,799 million), which is down 27.2% from the same period in 2008. Honda blamed the revenue decline on decreased sales in the automobile business and unfavorable currency translation effects. Declines were also substantial in its motorcycle and power products units.

But Honda said it expects a net profit for the fiscal year of 155 billion yen ($1.7 billion), which is nearly four times its initial outlook for a 40 billion yen, due to Japanese government incentives for green cars and strong sales in China.

Shares of Honda slumped about 2% Wednesday, while Daimler was down about 5%. But shares of both are up more than 10% from three months ago.

Visit AOL Money & Finance for more earnings coverage.

Tags: DAI, Daimler, green cars, HMC, Honda, inthenews, Mercedes-Benz

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Last updated: November 21, 2009: 10:37 PM

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