Luxury Cars and Trucks Boost Daimler's Profit
German luxury car maker Daimler said Friday that its first-quarter net profit nearly doubled, and maintained a rosy outlook for the year amid strong demand for its Mercedes-Benz cars and also heavy trucks.
Daimler said net profit jumped to 1.18 billion euros ($1.75 billion) in the three months from January to the end of March, from 612 million euros in the same period of 2010.
Analysts polled by Dow Jones Newswires had forecast a slightly higher profit of 1.26 billion euros however, and Daimler shares slumped in midday trades on the Frankfurt stock exchange.
Sales by the group gained 16.5 percent to 24.7 billion euros, a statement said, in line with market expectations.
Echoing comments from other German makers of upscale automobiles, Daimler reiterated upbeat guidance for the rest of the year, forecasting core earnings before interest and taxes "to be significantly higher than in 2010."
The company posted Ebit last year of 7.27 billion euros.
First quarter Ebit soared by 71 percent on the year meanwhile, to two billion euros, Daimler said.
"This puts us well ahead of our planning and confirms our positive outlook for the year 2011," chairman Dieter Zetsche added.
Sales were forecast to exceed the 2010 level of 97.8 billion euros, when Daimler sold nearly 1.9 million vehicles
Passenger car sales should gain more than seven percent this year, finance director Bodo Uebber told a telephone press conference.
Mercedes posted a 12 percent gain in the first quarter to 310,000 units, and all regions and all divisions contributed to Daimler's results.
Mercedes accounted for 1.29 billion euros of the first-quarter Ebit, a gain of 60 percent, and Daimler Trucks added 415 million, up from 130 million in the first quarter of 2010.
The group reported 49 million euros in costs at Daimler Trucks however, the world's leading heavy truck maker, along with 29 million euros at Daimler Financial Services in connection with the earthquake and tsunami in Japan.
Mitsubishi Fuso, a key Daimler Truck brand, is based in Japan, where output was cut after the March 11 quake until April 20.
Uebber said the group expected further costs of between 50-100 million euros stemming from the disaster.
But quarterly global truck sales nonetheless gained 27 percent on the year to 89,300 vehicles.
Meanwhile, tornadoes that slammed the southern United States this week, killing more than 300 people, did not do serious damage to a Daimler plant in Tuscaloosa, Alabama, the finance director added.
He said demand for passenger cars in China, now a crucial market for luxury auto makers, would increase by 10-15 percent this year, and forecast sustained growth in the future.
Shares in the group fell however by 1.70 percent to 52.19 euros in midday trades on the Frankfurt stock exchange, while the DAX index of German blue-chips was 0.22 percent higher overall.