BERLIN—Daimler AG, the German luxury car maker, Friday reported sharply higher profit in the three months to the end of September, driven by strong sales of its new E-class models, sport-utility vehicles and positive currency effects.

Daimler's results beat analyst estimates, driven higher by strong profit growth at Mercedes-Benz Cars, Mercedes-Benz Vans and Daimler Financial Services and despite a sharp decline in earnings at Daimler Trucks.

Mercedes-Benz Cars, the company's biggest division, saw strong demand for its luxury sedans in China, pushing sales higher and keeping Daimler on track to overtake rival BMW AG. The growth comes even as Daimler is investing heavily in new technology for electric vehicles and self-driving cars and despite a growing slump in its trucks business.

Net profit in third quarter was €2.60 billion ($2.83 billion), up from €2.39 billion the year before, while earnings before interest and taxes after special items, or EBIT, rose 10% to €4 billion. Revenue rose 4% to €38.6 billion.

Daimler confirmed its outlook for the full year, saying it expected to achieve revenue at about the same level as last year, with growth in Western Europe and Asia, but declining in North America as the U.S. market slows down.

"Daimler remains on track to achieve our earnings forecasts for the full year, despite volatile sales and finance markets," said chief finance officer Bodo Uebber.

The company expects EBIT to "increase slightly" in 2016, despite sharply lower earnings in the struggling truck division.

Revenue at Mercedes-Benz Cars rose 12% to €23.3 billion in the third quarter, and EBIT rose 23% to €2.7 billion, driven higher by "growing unit sales in the SUV segment and the market success of the E-class," the company said.

Daimler Trucks, which issued a profit warning in May and has warned of job cuts, suffered a 19% decline in revenue to €7.8 billion in the three months to the end of September. Revenue was hit by continued economic troubles in emerging markets, falling demand in the U.S., Turkey and the Middle East, and "intense competition" in Europe.

Write to William Boston at william.boston@wsj.com

(END) Dow Jones Newswires

October 21, 2016 03:25 ET (07:25 GMT)