Daimler’s share price dived nearly 3% today after the Mercedes Benz parent company cut its profit forecast to take account of its diesel transgressions
The new Mercedes GLE, unveiled at the Auto show in Paris, Oct. 2, 2018, has been slow to reach showrooms. Daimler’s share price dived nearly 3% Monday after the Mercedes Benz parent company cut its profit forecast to take account of the cost of its diesel transgressions.quarter profits would take a “high three-digit-million” hit after the company was found to have used software in some diesel engines which masked actual noxious emissions. This is the 3profit warning since 2018.
Citi Research said despite the warning it still sees risks to 2020’s earnings because of what it called a multitude of cyclical and structural issues and historic accounting practices. “In light of this, we believe the key debate with investors should be having is around the trajectory of the earnings decline rather than the ultimate destination,” he said.
“These warnings are terrible for auto valuations across the board. They come at a time when the industry is facing its largest emission challenge in history. Mercedes alone needs to improve fuel efficiency in EU by 22% . We estimate total penalty risks of about 2.7 billion euros and costs to comply of 1.73 billion euros .
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