Daimler (NYSE:DAI) will deliver its first quarter earnings on Friday. We expect solid earnings as the company is making new sales records each month and increasing its market share in high priority regions. Mitigating this growth will be heavy investments in new production facilities and a wider range of cars and trucks to continue its growth in the mixed economic outlook. The company has a long term goal of becoming the top car maker in luxury car segment by 2020and a short term target of increasing sales to 1.6 million units by 2015. If the current performance of the company continues, it is extremely possible that it may meet its short term sales objective in the 2012 itself.
Daimler’s Mercedes-Benz competes globally with BMW (GR:BMW), GM (NYSE:GM), Ford (NYSE:F), Honda (NYSE:HMC) and Toyota (NYSE:TM), among others. We currently have a price estimate of $72 for Daimler’s stock, which is well above its market price.
Strong Sales driving company growth
Daimler’s sales for the first quarter stood at 313,902 units, an increase of 11.9% over the prior year. This is the company’s strongest first quarter performance ever in its 126 year old history. Daimler’s sales in North American business increased at a rate faster than the overall global sales expanding by 15.3% to 61,513 units.
In its home market Germany, the company sold 56,552 units since the beginning of the year, an increase of 14.6% while in Hong Kong and China, other important markets, Daimler sold 51,328 units in the first quarter, registering a growth rate of 19.5%. These improved sales numbers should augur well for company’s first quarter earnings.
Introduction of new models and improved performance of flagship Mercedes brand
The first-quarter vehicle sales of Daimler’s flagship Mercedes Benz unit rose 12% and 20% year-on-year at its core Mercedes-Benz passenger car division and its truck unit, respectively. The sales of Mercedes Benz globally saw its strongest month ever in March, reaching 131,334 units after a growth of 11%.
This growth was partially driven by the new models introduced by the company. The new Mercedes Benz SL, CLS Shooting Break, new models of Actros truck and hybrid cars were extremely well received by the company and have led Daimler to target ten more new models in its portfolio by the end of 2015.