Daimler hikes 2nd quarter net income to EUR4.58 billion

Article by Anita Panait, on July 25, 2013

Daimler expects the car market in western European to improve in the next few months, as falling demand in the region seems to have “bottomed up.”  The German carmaker said in a statement that a gradual improvement of the market situation in western Europe is to be expected in the second half.

The possibility of a turnaround in industry-wide sales in the region adds to the high demand for new models like the Mercedes-Benz CLA compact and the next generation of the S class. Daimler is banking on these vehicles to "significantly" boost its profit in the second half of 2013.

The second-half boost, however, would not be able to totally offset Daimler’s weak performance in the first six months of 2013.

Daimler reiterated a drop in full-year earnings before interest, taxes and one-time items from the EUR8.1 billion ($10.7 billion) operating profit posted in 2012, no thanks to a weaker profit at its Mercedes unit. Daimler more doubled its EBIT in the second quarter of 2013 to EUR5.24 billion, boosted by EUR3.21 billion in proceeds from the sale of shares in the parent of Airbus SAS.

The German carmaker posted a 3-percent surge in sales in the quarter to EUR29.7 billion. Its net income in the second quarter of 2013 jumped to EUR4.58 billion from EUR1.57 billion in the same period in 2012. Daimler chief executive Dieter Zetsche said in a statement that the results represent progress in their earnings development, adding that it should not be a cause for complacency.

He said that they will continue to work hard on achieving their goals. Mercedes failed to shorten the gap with main rivals BMW and Audi in the race to become the best-selling luxury car brand in the world in 2013. Although Mercedes posted a 6-percent jump in sales to 694,433 cars and SUVs, BMW brand logged an 8-percent surge in deliveries to 804,248 vehicles. Audi, meanwhile, posted a 6-percent hike in sales to 780,500 units.

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