Daimler posts forecast-busting profit as China drives recovery

The Mercedes Benz star is seen on the bonnet of a new Mercedes-Benz S-Class limousine at the company’s test center, near Immendingen, Germany October 14, 2020. Picture taken October 14, 2020. REUTERS/Arnd Wiegmann

German car and truck maker Daimler (DAIGn.DE) achieved a better than expected surge in first-quarter operating profit on higher vehicle prices and strong demand in China.

Shares in the company were indicated to open 2.2% higher in pre-market trade, outperforming the German blue-chip DAX index (.GDAXI), which was seen opening 0.3% higher.

Daimler, which this week unveiled an electric version of its flagship Mercedes-Benz S-Class sedan, on Friday said that quarterly adjusted group earnings before interest and tax jumped to 5 billion euros ($6 billion) from 719 million euros a year earlier.

That was above average analyst expectations of 4 billion euros, prompting it to release key figures ahead of schedule, it said.

“Favourable sales momentum at Mercedes-Benz Cars driven by all major regions, especially China, strongly supported the product mix and pricing in the first quarter,” Daimler said.

Volkswagen (VOWG_p.DE) a day earlier had also singled out China as one of the drivers of a global automotive recovery. read more

“Daimler was able to benefit from this development thanks to convincing product substance combined with significant fixed cost reductions,” Daimler added.

The company, which is due to release detailed quarterly results on April 23, said adjusted industrial free cash flow reached 2.8 billion euros, against a consensus forecast for 1.8 billion euros.

($1 = 0.8355 euros)

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source: reuters.com