Daimler Says Profits Up Again After Weak Start of 2013 image

Daimler said that its second-quarter profit more than doubled thanks to the selling of its stake in aerospace group EADS.

Daimler’s Mercedes has been struggling to match German rivals BMW and Audi for efficiency and scale in smaller vehicles or to at least equal their success in the Chinese market. Mercedes, currently the third largest premium automaker in the world, has started a new phase of rolling out new models and has began to implement its strategy aimed at reaching savings of 2 billion euro by the end of 2014.

During the first three months of the year Daimler earned 2 billion euro before interest and tax, compared with 917 million euro during the same period in 2012. This figure does not include the 3.2 billion euro after selling its stake in EADS. The German automaker said that it expects to surpass the first-half EBIT in the second half of the year.

“The implication clearly is that Daimler is bouncing back” from the first quarter, said Frankfurt-based Bankhaus Metzler analyst Juergen Pieper. “Cost savings and forthcoming model releases should underpin a second-half uptrend.”

In the third quarter Mercedes will launch its overhauled flagship S-Class in Europe, and reach overseas markets in the fourth quarter. In the first quarter the profit for Mercedes’ luxury division was 1.04 billion euro, down 21% from 2012, due to the slump in Europe and its distribution issues in China.

Source: Reuters