Daimler Slashes Dividend as Cash Flow Dwindles -- Earnings Review
February 11 2020 - 10:12AM
Dow Jones News
By Cristina Roca
Daimler reported fourth-quarter results on Tuesday morning.
Here's what we watched:
REVENUE REVIEW: Revenue for the quarter rose to 47.13 billion
euros ($51.54 billion), broadly in line with expectations of
EUR47.33 billion, according to FactSet.
EARNINGS REVIEW: The maker of Mercedes-Benz swung to an
unexpected EUR11 million loss from a EUR1.64 billion profit the
year before. Analysts had seen net profit for the quarter at
EUR776.7 million, according to FactSet.
WHAT WE WATCHED:
-FREE CASH FLOW: Free cash flow at year-end stood at EUR1.4
billion, down from EUR2.9 billion a year earlier. Company CEO Ola
Kallenius said the company has a "cost problem." Measures to cut
costs and increase cash flows are necessary, he said during an
earnings conference.
-DIVIDEND: Pressure on Daimler's free cash flow led to a big
dividend cut. Daimler said it will propose a dividend of EUR0.90
per share, less than a third of what it returned to shareholders
last year. However, CFO Harald Wilhelm backed the company's
commitment to a 40% dividend payout ratio.
-CORONAVIRUS: Daimler's CEO said it was too early to assess the
fallout from the coronavirus outbreak in China, but that Daimler's
Beijing factories started up yesterday after the extended Lunar New
Year closures. Daimler will now "gradually ramp up both on the
production side and on the retail side," he added.
Write to Cristina Roca at cristina.roca@dowjones.com;
@_cristinaroca
(END) Dow Jones Newswires
February 11, 2020 09:57 ET (14:57 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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