Mercedes lowers margin guidance for cars as quarterly profit falls 16%

By Steve Goldstein

Mercedes-Benz Group on Friday reiterated its financial goals for the year, but with a better margin for vans and a worse one for cars.

Mercedes says its adjusted return on sales from cars will now range from 10% to 11%, vs. 10% to 12% previously, but its van margins will range from 14% from 15%, from 12% to 14% previously.

That's after a second quarter in which both profit and revenue fell. Profit fell 16% to EUR3.06 billion, while revenue fell 4% to EUR36.74 billion.

Analysts polled by Visible Alpha expected earnings of EUR2.95 billion on sales of EUR37.06 billion.

The German automaker said its sales were robust compared to a subdued market environment. In unit terms, car sales fell by 4%, including a 17% dive from its top-end line. That led to an unfavorable product and market mix, though raw material prices were lower, as were research-and-development costs.

It's still expecting earnings before interest and tax, as well as free cash flow from its industrials business, to be slightly below last year's levels on flat revenue.

Mercedes shares (XE:MBG), flat on the year, drifted lower in early Frankfurt trade.

It's been a difficult week for European automakers, with Stellantis (IT:STLAM) and Renault (FR:RNO) shares both declining after their second-quarter results.

-Steve Goldstein

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

07-26-24 0416ET

Copyright (c) 2024 Dow Jones & Company, Inc.