What To Expect From Daimler’s Q1 2018 Results

Daimler AG (OTCMKTS: DDAIF) will release its first-quarter results and conduct a conference call with analysts on 27th April. Consensus market estimates have a mean adj-EPS estimate of $2.45 and mean revenue estimate of $50.03 billion for the company’s first quarter. The revenue figure depicts a 5% growth rate, however, EPS is expected to be lower by 21% year-on-year (y-o-y). Strong sales volume is most likely to be driven by the company’s Mercedes Benz division and Daimler’s truck division, with higher R&D expenditure weighing on the bottom line.

The company in its latest production release reported a record quarter for its Mercedes-Benz division, with sales volume up by 6% y-o-y. Strong sales figures were particularly experienced in China where sales volume grew by 17% y-o-y. Additionally, the company saw notable sales figures in other APAC regions including South Korea, India, and Malaysia. SUVs emerged as the most popular segment representing a significant portion of the total sales volume. Apart from the company’s Mercedes-Benz division, the company reiterated its confidence on the growth of its truck division with a significant increase in the demand for trucks expected from the company’s key markets.

The company in its last earnings release guided toward a higher research and development (R&D) expenditure in 2018 compared to 2017. The company plans to spend 32 billion Euros ($40 billion) in 2018 and 2019 on R&D in the areas of autonomous driving, connectivity, and electric mobility. This investment will also be used for plant and equipment aimed towards production preparation of new models, production of batteries, and other production facilities including an electric network for worldwide vehicles.

The company per its initial guidance expected its 2018 EBIT to be close to its prior-year figure. However, with the adoption of a new accounting standard, the company now expects its 2018 EBIT for its Mercedes-Benz Cars and Daimler Buses to be slightly higher than 2017 level, with the earnings outlook for other divisions’ unchanged. Our key assumptions for the company’s 2018 results are summarized in our interactive platform, you can make changes to these assumptions to arrive at your own fair price estimate for the company.

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