BERLIN--German car maker Daimler AG on Tuesday confirmed its
outlook for significant growth this year after first-quarter profit
nearly doubled, boosted by sales of Mercedes-Benz cars and
Freightliner trucks.
Both earnings and revenue beat expectations. Net profit rose to
1.96 billion euros ($2.13 billion) from EUR1.03 billion a year
earlier, beating consensus forecasts of EUR1.61 billion. Mercedes
charged higher prices for its cars in the U.S. and China, and
efficiency improved, which also boosted earnings, said Finance
Chief Bodo Uebber.
Revenue increased 16% to EUR34.24 billion, helped by
exchange-rate effects. The group sold 641,600 cars and commercial
vehicles, 13% more than a year earlier. C-Class sedans and estates,
as well as compact cars did particularly well. Truck sales
increased in the U.S.
The strong start to the year is the latest evidence that Chief
Executive Dieter Zetsche's strategy of growing business by
expanding its car model range and more attractive designs is paying
off. Mr. Zetsche's goal is for Mercedes to eventually edge out
rivals BMW AG and Audi AG as the top luxury car maker.
Daimler is the first of the German premium car makers to report
first-quarter results, with Volkswagen AG, Audi's parent company,
reporting Wednesday and BMW due May 6.
Daimler also reported a higher return on sales of the cars
division, a key gauge of profitability, which rose to 9.4% from
7.0%. Analysts called that increase a positive surprise.
"After years of following behind, Daimler's car margin is
finally catching up with the premium competitors BMW and Audi,"
said Frank Schwope of Norddeutsche Landesbank.
Daimler reiterated its guidance for significant growth in
adjusted earnings before interest and taxes this year.
"We are on a very good path to meet our forecasts," said Mr.
Uebber. He said the effect of favorable exchange rates will add
about EUR1 billion to pretax profit in full-year 2015, although the
impact in the first quarter was small because rates were largely
hedged.
He predicted car sales of Daimler's Mercedes-Benz and Smart
brands will rise faster than the global market this year. Daimler
expects that market to grow 3%, down from a previous forecast of
4%. The company assumes the Russian market will shrink drastically,
but continues to expect strong growth in China.
For medium and heavy-duty truck markets, Daimler has raised its
expectations for North America to between 10% and 15% growth and
for Europe to between 5% and 10% growth. But for the Brazilian
truck and bus markets, the group has become more pessimistic.
Weak developments in Latin America will lead to a significant
decrease in Daimler bus sales this year, the company said.
Write to Friedrich Geiger at friedrich.geiger@wsj.com
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