Daimler logs 21% jump in operating profit in Q3 2014

Article by Andrew Christian, on October 24, 2014

Daimler posted a 21-percent surge in operating profit in the third quarter of 2014 to EUR2.79 billion ($3.53 billion). Its Mercedes-Benz Cars division, which includes the Smart brand, logged a profit that was 8.5 percent of revenue in the quarter, compared to just 7.3 percent in the same period in 2013. Daimler also logged a group earnings before interest and tax (EBIT) of EUR3.73 billion ($4.72 billion) for the third quarter of the year.

The figure includes a gain of EUR1.01 billion from the Daimler's sale of its 50-percent holdings in Rolls-Royce Power Systems. Mercedes-Benz Cars posted a 32-percent rise in third-quarter EBIT to EUR1.58 billion ($2 billion). Daimler Trucks, meanwhile, logged a 17-percent jump in EBIT from ongoing business in the quarter.

Daimler Trucks’ surge was attributed to strong demand in North American Free Trade Agreement countries that helped to offset a decline in Europe. Daimler posted a 10-percent gain in third-quarter revenue to EUR33.1 billion. Mercedes also posted its best sales month in its history in September, thanks to launches of new models as well as surging demand for them in China.

In a statement, Daimler chief executive Dieter Zetsche remarked that the carmaker’s strategy is “paying off," saying that the group is growing profitably and is optimistic “beyond the full year." Daimler managed to more than double deliveries of the top-of-the line Mercedes-Benz S-Class and is introducing more luxurious versions of the model like the $1-million six-seat Pullman variant to boost its high-end image.

Mercedes is adding the AMG GT sports car that was unveiled at the Paris Motor Show. Mercedes is likewise expanding its lineup of more affordable models like the GLA compact SUV. Frank Schwope, an analyst at NordLB, remarked that Mercedes features a fresh model lineup that is giving it a lot of momentum. He said that they expect Mercedes to post more profitable quarters through most of 2015.

Topics: daimler, profit

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