Daimler second
Credit: Reuters/Michael Dalder
The logo of German luxury car maker Mercedes-Benz, a subsidiary of Daimler AG, is pictured in Munich October 22, 2013.
The Stuttgart-based maker of trucks and cars said group earnings before interest and tax (EBIT) from ongoing business rose to 2.46 billion euros ($3.3 billion) from 2.19 billion in the three months ended June, beating a 2.38 billion average forecast in a Reuters poll.
Profitability at Mercedes-Benz Cars, Daimler Buses and Trucks all rose, the company said, while cautioning that it was still looking for ways to cut costs amid turmoil in emerging markets.
'We are continually looking at ways to improve our structural efficiency,' Chief Executive Dieter Zetsche told journalists during a conference call, while declining to put a figure on the extent of potential savings.
Currency volatility, mainly related to emerging markets including Brazil, sliced 260 million euros from Daimler's earnings during the quarter.
The EBIT of Mercedes-Benz Cars jumped 35 percent and its return on sales - closely watched as a measure of performance compared with rivals Audi and BMW - rose to 7.9 percent from 6.4 percent in the year-earlier quarter, though still below the 10 percent goal it has set itself.
'If all markets perform well and the product is good, Daimler can reach the 10 percent even without a new savings program,' Arndt Ellinghorst, London-based analyst at investment researchers ISI Group said. 'Whether the margin would be sustainable is a different matter.'
Ellinghorst has a 'buy' rating on Daimler shares.
RAISING PRICES
The improved profit margins are down to Mercedes-Benz's ability to raise prices with the introduction of new models such as a facelifted E-Class and the new S-Class in China as well as compact cars, Daimler said.
The company relaunched its A-Class compact late in 2012, unveiled a new S-Class flagship limousine in July 2013 and launched a new C-Class in March.
Demand for Mercedes-Benz vehicles remains robust even in Russia, where the company posted a 20 percent rise in sales in the first half of the year, Zetsche said.
Daimler affirmed a forecast for a significant rise in 2014 group EBIT from ongoing operations compared with 2013 and said it expected results in the second half of the year to exceed those of the first.
Shares in Daimler rose 2.1 percent to 67.55 euros in early trading, while the German blue-chip DAX index was flat.
On a reported basis, second-quarter group EBIT slumped 41 percent to 3.1 billion euros as a year-earlier one-off gain of 3.2 billion euros ($4.3 billion) from the sale of shares in EADS - now Airbus - was not repeated.
(Additional reporting by Jan Schwartz; editing by Maria Sheahan and Tom Pfeiffer)
Post a Comment for "Daimler second"