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Daimler Expects Strong Earnings Growth This Year After Robust Third Quarter
By FRIEDRICH GEIGER
Updated Oct. 22, 2015 6:05 a.m. ET
BERLIN— Daimler AG said Thursday it is on course for strong earnings growth this year after reporting robust sales of its Mercedes-Benz cars in the third quarter, adding it hadn’t felt any ripple effects from Volkswagen AG’s emissions-rigging scandal.
Daimler’s net profit for the three months ended Sept. 30 totaled €2.39 billion ($2.70 billion), slightly above analysts’ estimates but below the year-earlier figure of €2.74 billion, which was boosted by an extraordinary gain of €1.01 billion related to the sale of a stake in an engine-making venture with Rolls-Royce Holdings PLC.
The premium car maker confirmed its forecast for significant growth in revenue and adjusted operating earnings for the full year after revenue in the third quarter jumped 13% to €37.28 billion on a corresponding 13% rise in vehicle sales.
Mercedes car sales rose strongly in China and Western Europe, and global truck sales increased slightly. Currency movements also had a positive effect on revenue amid the dollar’s strength against the euro, the company said.
Daimler’s chief financial officer, Bodo Uebber, said car buyers haven’t been put off diesel technology, despite the scandal in which Volkswagen dodged emissions standards for diesel-powered cars.
“We see no effect on our sales of diesel vehicles,” he said, summarizing comments from sales staff.
“We’re benefiting in all business areas from our young and expanded model range,” Mr. Uebber added.
The operating margin of Daimler’s car division rose to 10.5% in the third quarter from 8.5% in the year-earlier quarter. The strong third-quarter performance was helped by strong demand for C-Class sedans and Mercedes sport-utility vehicles, said the company.
Mercedes has an expanded model range and launched new versions of its cars in the past year, which have helped sales in recent quarters. The truck division’s margin increased to 8.2% from 6.9%.
Mr. Uebber said he expects further sales growth in China next year.
Daimler’s third-quarter results “have again displayed its current outperformance versus the broader market and more importantly also versus its German premium competitors,” said Equinet Bank analyst Holger Schmidt in a note to clients.