Daimler missed the Street’s third-quarter earnings per share consensus of EUR 1.13 by EUR 0.08. Year-over-year margins continue to tighten on weaker European volume as well as launch costs. During the quarter, European car and truck volume declined 4.3% and 11.1%, respectively.
Vehicle launches this year have included the GLK compact sport-utility vehicle, the G-Class SUV and the new A-Class as well as a completely new market entry, the CLS Shooting Brake. Accounting for the time value of money, the fair value in our discounted cash flow model had risen to EUR 73 per share. However, after lowering our 2012 and 2013 EPS estimates to EUR 4.85 and EUR 5.20 from EUR 5.25 and EUR 5.50, respectively, as well as assuming 0.2 percentage point lower margins in the outlying years of our forecast, our fair value estimate remains unchanged at EUR 71.
For the third quarter, Daimler reported revenue excluding financial services of EUR 25.0 billion, a 7.0% increase from EUR 23.4 billion last year. Revenue from Mercedes-Benz cars rose 14.0% while Daimler truck revenue was higher by 15.8%. Vans and buses declined 4.6% and 6.9%, respectively.
However, average revenue per unit increased 6.4%, primarily due to Mercedes cars and Daimler trucks, implying a richer mix versus the prior year. Despite the higher revenue, the company reported operating income of EUR 1.696 billion, down 2.8% from EUR 1.744 billion in the third quarter of 2011. EBIT margin was 6.8%, a decline of 0.7 percentage point versus the prior year.
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