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Daimler profit, revenue rise but 2018 earnings to be dampened by spending

Daimler AG posted higher net profit and group revenue in the fourth quarter of 2017, contributing to record full-year profit as unit sales exceeded targets, but the automaker warned that 2018 earnings will be reduced by "very high" expenditures.

The company reported a net profit of €3.29 billion in the fourth quarter of 2017, up 49% from €2.21 billion in the year-ago period, according to preliminary and unaudited figures.

Fourth-quarter EPS stood at 2.99, up 49% from 2.01 in the year-ago period. Group revenue came in at €43.59 billion, up 6% from €41.00 billion in the year-ago quarter.

The company proposed its highest-ever dividend of €3.65 per share in 2017 compared with €3.25 the previous year. It also announced a €3 billion funding increase to its pension plans.

For 2018, Daimler expects a slight increase in unit sales and revenue on the back of a strong product portfolio, an improving market position, and the current upswing in global automotive markets.

But it warned that "the continuation of very high advance expenditure for the model offensive and innovative technologies will dampen earnings growth" and will likely keep group EBIT in 2018 "in the magnitude" of that in 2017, which climbed 14% to 14.68 billion from 12.90 billion in 2016.

The company said it will significantly increase investment in property, plants and equipment in 2018. It added that it expects to achieve growth targets with a "slight" workforce increase, especially in its expanded international production network and research and development for electric mobility and digitization.

For the full year 2017, net profit increased 24% to a record €10.9 billion from 8.78 billion in the previous year, while group revenue was up 7% to €164.33 billion from €153.26 billion in 2016. Total unit sales for 2017 reached a record high of 3.3 million vehicles, up 9% from the previous year, beating the company's growth target.