Daimler raises 2010 outlook after posting strong Q3 results
German luxury car maker Daimler, owner of Mercedes Benz, raised its 2010 targets Thursday after posting a third quarter net profit that far surpassed market expectations.
Daimler, also the world leader in heavy truck manufacturing, benefitted from a rebound in auto and commercial vehicle markets to erase a catastrophic result posted in the third quarter of 2009.
Its net profit for the latest three month period soared to 1.6 billion euros (2.2 billion dollars), dwarfing the 56 million euros reported in the same timeframe a year earlier.
It also largely surpassed an average analyst forecast of 1.12 billion euros compiled by Dow Jones Newswires.
Sales by the Stuttgart-based firm jumped by 30 percent to 25 billion euros.
Daimler is now aiming for core earnings of more than seven billion euros this year, compared with its previous estimate of six billion.
In the nine months since January it has already earned 5.7 billion euros.
"Daimler assumes it will be able to continue along this successful path also in the fourth quarter," a statement issued by the automaker said in contrast to compatriot Volkswagen, which expects weaker sales towards the end of the year.
"Based on the divisions' planning, Daimler expects total unit sales and group revenue to increase significantly in full-year 2010," from last year's figures of 1.6 million vehicles and 78.9 billion euros, the statement said.
In the third quarter, Daimler's closely watched core earnings before interest and taxes leapt to 2.42 billion euros from 470 million in the same period a year earlier, on a 30 percent gain in sales to 25.1 billion euros.
Among the special factors that helped net results was an adjustment of health-care and pension benefits at its Daimler Trucks North America unit worth 183 million euros.
A favourable verdict in a lawsuit that involved Daimler contributed 218 million euros to the group's bottom line as well, it said.
But day-to-day operations were in large part responsible for the leap in earnings, with unit sales climbing by 23 percent in the quarter to 475,100 cars and commercial vehicles worldwide.
Mercedes-Benz contributed 1.3 billion euros to overall earnings, up from 355 million a year earlier, and now benefits from "a strong presence in markets were exports are expanding, like Asia," finance director Bodo Uebber told a telephone conference.
"We continue to have a lot of success in the United States" as well, he added.
Uebber expected Mercedes to post core earnings of 4.5 billion euros this year, and Daimler Trucks to add another 1.1 billion.
The group's profit margin would likely provide an ample basis for dividends this year, the finance director said, though he declined to provide details.
That may have put investors off, and after showing modest gains earlier in the day, Daimler's shares were down by 1.65 percent at 46.84 euros in late trading.
The German DAX index of leading stocks was 0.52 percent higher overall.
© 2010 AFP