Daimler Slashes Dividend as Cash Flow Dwindles -- Earnings Review

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 [e-mail]; @_cristinaroca

(END) Dow Jones Newswires

February 11, 2020 09:57 ET (14:57 GMT)

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