Daimler profits double on sales of Mercedes E-class, SUVs
FRANKFURT, Germany (AP) - German automaker Daimler AG says net profit doubled in the first three months of the year as the new version of the company's Mercedes-Benz E-Class sedan and its SUV lineup boosted sales.
The Stuttgart-based company raised its profit outlook for the year, with CEO Dieter Zetsche saying in a statement Wednesday that earnings and sales would "significantly increase." The earlier prediction was for a slight increase.
Net profit rose to 2.80 billion euros ($3 billion) from 1.40 billion euros in the year-earlier quarter. Revenue rose 11 percent to 38.77 billion euros.
The net profit figure beat expectations for 2.4 billion euros as compiled by financial information provider FactSet.
The company credits strong sales of the E-Class, which can come loaded with advanced driver-assistance features, and SUVs, which bring high per-vehicle profits. Earnings were also increased by a one-time plus of 183 million euros after new investors joined the company's HERE mapping venture with other automakers and by currency exchange-rate shifts.
Daimler gave a restrained outlook earlier this year as it reported setting aside more money for investment in research and development of new vehicles as it positions itself for possible changes in the auto industry, including more electric cars, car-sharing and eventually autonomous vehicles. The company is relying on strong profits from its Mercedes-Benz luxury car business to fund investment into new technology so it can adapt to shifting trends in how people buy and use cars.
Wednesday's figures suggested that the Mercedes profit machine is rolling head. The division churned out 2.23 billion euros in operating profit, up from 1.39 billion in the year-earlier quarter. Significantly, it raised its return on sales - a measure of how much the company is making per vehicle - to 9.8 percent from 7.0 percent. A new version of its flagship S-Class sedan, introduced last week at the Shanghai auto show, offers the prospect of more support for earnings and profit margins.