* Q4 group EBIT 2.53 bln euros vs forecast 2.32 bln
* Lifts dividend to 2.25 euros from 2.20 euros
* Mercedes-Benz Cars Q4 return on sales rises to 8 pct
* Sees significant growth in group EBIT in 2014
* Shares up 3.7 percent, leading DAX higher
(Adds analyst comments, rewrites throughout)
By Edward Taylor
STUTTGART, Germany, Feb 6 Daimler
forecast a significant increase in profit this year as strong
sales of its new luxury Mercedes-Benz models, such as the
S-Class limousine, help it shake off past earnings
Having dropped to third place in luxury car sales rankings
in 2011 behind German rivals BMW and Volkswagen's
Audi, Daimler's premium car division narrowed the
gap in 2013 thanks to its redesigned vehicles, which also
include new compact cars such as the A-Class sedan.
Mercedes-Benz sales in Europe and the United States rose
last year, offsetting a slight decline in Daimler's German home
market, whilst deliveries in China jumped 15 percent.
"The numbers are good, outlook is good, it's all good,"
Metzler Bank analyst Juergen Pieper said. "Daimler came off its
high horse, realised they were no longer in front and began to
Daimler said on Thursday it expected group earnings before
interest and tax (EBIT) from ongoing business to "increase
significantly" in 2014, based on improved profitability at its
trucks and cars units which also have a rejuvenated range.
The results contrast with a string of disappointing earnings
under the stewardship of Chief Executive Dieter Zetsche, who was
forced to scrap margin targets at Mercedes-Benz in late 2012,
and later had his contract extension curtailed.
"2013 was a year that we didn't begin particularly well, but
which we ended very successfully. Our efforts paid off," Zetsche
Stuttgart-based Daimler reported a 45 percent rise in
fourth-quarter adjusted group EBIT to 2.53 billion euros ($3.42
billion), above the 2.32 billion euros forecast by analysts in a
Profitability at Mercedes-Benz Cars improved thanks to the
range of fresh new cars including the A- and B-Class compact
cars, helping to lift the division's return on sales from
ongoing operations to 8 percent in the quarter, up from 5.3
percent in the year-earlier period. The company aims to increase
that to 10 percent in the medium term.
Daimler shares were up 3.7 percent to 63.11 euros by 1214
GMT, making them the top gainers on Germany's blue-chip DAX
index, lifted in part due to a dividend increase to
2.25 euros, up from 2.20 euros a share.
Analysts cautioned that there was limited upside potential
for the stock given its recent outperformance and the fact that
profit margins at Mercedes-Benz still lag behind rivals.
In the past twelve months, Daimler's shares have risen more
than 40 percent and the stock is now trading on a forward
price-to-earnings ratio of 10.6, compared with 9.9 at Bavarian
rival BMW and 7.9 at Volkswagen.
Bernstein Research analyst Max Warburton said while Mercedes
would probably deliver sales growth this year, its margin was
unlikely to significantly exceed 8 percent.
BMW and Audi, both of which have yet to publish
fourth-quarter results, last reported a quarterly automotive
operating margin of 9 and 9.4 percent, respectively.
Carmakers are generally upbeat about sales this year.
Worldwide, auto sales in 2014 are seen rising 3.4 percent,
according to research firm IHS. Premium carmakers are expected
to benefit disproportionately from such growth.
Daimler said around 130,000 employees will receive a bonus
of 500 euros and a profit sharing payment of 2,541 euros.
($1 = 0.7390 euros)
(Reporting by Edward Taylor, Ilona Wissenbach, Irene Preisinger
and Jan Schwartz; Editing by Mark Potter and Elaine Hardcastle)