Like a big silver Mercedes gliding effortlessly past lesser cars on the Autobahn, German car and truck maker Daimler
But even fat cats in Mercedes cars hit potholes now and then, and Mercedes' parent is no exception: Daimler today posted a surprise net fourth-quarter loss and scrapped this year's annual dividend.
The loss of 352 million euros looks pretty good in comparison with the 1.53 billion euro loss a year earlier, but it was still a long way off from anaylsts' expectation of a 255 million euro profit. And of course the dividend is exactly $0.60 less than last year's $0.60 dividend.
They were looking good until they weren't
As automakers go, Daimler has looked pretty good as of late. It lost money during the economic crisis, but those losses never reached the staggering levels seen at companies such as Ford
The company's product pipeline is strong, and with global demand for luxury cars finally starting to rise, it appears well positioned to steal market share from key rivals BMW and Audi. And sure enough, riding the success of the new Mercedes E-class, fourth-quarter deliveries of Mercedes and Smart cars rose by a solid 7%.
Alas, cars aren't Daimler's only business -- the company is also the world's largest truckmaker. When trucks, buses, and vans are included in the total, sales fell by 8%. But I don't think that's a Daimler problem as much as it's a global one -- with capital investment around the world still stalled, demand for new trucks remains quite thin across the board.
A stumble? Or a stall?
So is this a stumble or a sign of a larger stall? Daimler CFO Bodo Uebber was at pains to put the bad news behind the company, explaining that the dividend cut was a reaction to a weak 2009, not an expression of concern about 2010. The company expects, Uebber said, to pay a typical dividend at the end of this fiscal year.
Should we believe him?
While analysts -- and the market -- reacted negatively to the news, I think there's reason to be optimistic. The global heavy-truck market might be a drag for a while, the Mercedes-Benz Cars division is riding an impressive wave, and the division's new head of production and purchasing, Wolfgang Bernhard, is an extremely well-regarded and energetic talent. Mr. Market's overreaction to today's news might represent an intriguing opportunity.