Mercedes-Benz, the German luxury-car maker, released its third quarter results on Thursday. Here are the key details:
Net Profit
The company’s net profit for the quarter was 3.72 billion euros ($3.93 billion), a decrease of 7% compared to the same period last year.
Earnings Before Interest and Taxes (EBIT)
Mercedes-Benz’s quarterly EBIT reached EUR4.84 billion, surpassing the forecast of EUR4.53 billion provided by FactSet. Analysts credited this beat to a strong quarter for the company’s vans business.
Revenue
Sales dipped by 1.4% to EUR37.20 billion. FactSet analysts had projected revenue of EUR37.34 billion.
What to Watch
Headwinds
Mercedes-Benz faced challenges including high supplier costs, inflation, exchange-rate losses, and dampening demand in the industry. Chief Financial Officer Harald Wilhelm acknowledged these factors in a post-earnings call and expects high prices and inflation to persist in the next quarter.
Outlook
While Mercedes-Benz maintained its full-year outlook, it now predicts that its adjusted operating margin will land in the lower half of the targeted 12%-14% range.
EV Problems
Intense competition, particularly from Chinese-made battery-electric vehicles, has posed pricing difficulties for Mercedes-Benz. However, Wilhelm insisted that the company will prioritize margin over volume. Additionally, a shortage of 48-volt electric systems has caused production delays for some electric models.