INTERNATIONAL - Daimler cut its dividend as fourth-quarter operating profit fell 22 percent as trade wars and rising costs for developing electric and self-driving cars hit profits at Mercedes-Benz cars, the company said on Wednesday.
Daimler said the return on sales at Mercedes-Benz cars fell to 7.3 percent in the fourth quarter from 9.5 percent in the year-earlier period.
This, combined with a cut in the dividend from 3.65 euros a share to 3.25 euros, disappointed analysts and sent shares 2 percent lower to 52.02 euros, underperforming Germany’s blue-chip DAX index which was trading 0.22 percent lower.
“Daimler urgently needs efficiency measures,” Evercore ISI analyst Arndt Ellinghorst said on Wednesday. “At the moment the profitability of both Mercedes-Benz passenger cars and trucks lags behind peers.”
Daimler said it was working on “countermeasures” to increase profits but could not mention details about possible cost cuts because these were still being worked out.