Daimler profit rises in Q3 as Mercedes sales expand
Operating profit rose to 2.79 billion euros ($3.53 billion) from 2.3 billion euros a year earlier, Daimler said in a statement Thursday.
Profit at the Mercedes-Benz Cars division, which also includes the Smart brand, widened to 8.5 percent of revenue from 7.3 percent in the third quarter last year, the highest in more than two years.
Mercedes recorded its best-ever month for sales in the company's 88-year history in September, benefiting from new models and growing demand in China.
"Our strategy is paying off," CEO Dieter Zetsche said in the statement. "We are growing profitably and look to the future with optimism also beyond the full year."
Mercedes is adding the AMG GT sports car, which debuted at the Paris auto show, and more luxurious versions of the S class including a $1 million six-seat Pullman variant to bolster its high-end image. At the same time, the brand is expanding its lineup of more affordable models, such as the GLA compact sport-utility vehicle, as it seeks to topple BMW from the top spot in the luxury-car segment by the end of the decade.
"Mercedes-Benz has a fresh model lineup, which is giving the brand a lot of momentum," Frank Schwope, an analyst at NordLB in Hanover, Germany, said. "We’ll probably continue to see more profitable quarters through most of next year."
Group earnings before interest and tax (EBIT) were 3.73 billion euros ($4.72 billion), including a 1.01 billion-euro gain from the sale Daimler's 50 percent stake in Rolls-Royce Power Systems. EBIT at Mercedes-Benz Cars, which accounts for about 42 percent of the group total, increased 32 percent to 1.58 billion euros ($2 billion) in the third quarter.
Daimler Trucks posted a 17 percent rise in third-quarter EBIT from ongoing business as strong sales in the countries belonging to the North American Free Trade Agreement helped to offset a slump in Europe.
The company's third-quarter revenue advanced 10 percent to 33.1 billion euros.