FRANKFURT -- Daimler posted strong second-quarter financial results as margins increased at its Mercedes-Benz cars unit and the company had a higher-than-expected gain from selling its stake in aerospace group EADS.
Daimler's earnings before interest and tax (Ebit) for the quarter were 5.2 billion euros ($6.8 billion), the company said today. That compares with Ebit of 2.24 billion euros a year earlier.
Second-quarter Ebit at Mercedes-Benz cars, which includes the Smart city-car brand, dropped to 1.04 billion euros from 1.31 billion euros a year earlier, while revenue increased 6 percent to 16.3 billion euros. The profit decline reflected an ongoing slump in European markets and self-inflicted distribution problems in China.
Daimler's overall quarterly operating profit was boosted by a one-time gain from a sale of its stake in EADS, owner of airplane maker Airbus. The gain from the disposal was 3.2 billion euros, Daimler said on Friday, 19 percent more than estimated prior to the sale.
Excluding the 3.2 billion euros it made on the EADS sale, Daimler earned 2.0 billion euros before interest and tax, up from 917 million euros in the first three months of 2013. Three analysts had expected a figure of 1.7 billion euros on average.
"The numbers are very, very strong," said Sascha Gommel, a Frankfurt-based analyst at Commerzbank. Profitability at Mercedes "is significantly better than expected, thanks obviously to the model cycle," he said.
Daimler has struggled to match German rivals BMW and Audi for scale and efficiency in smaller cars or to equal their success in China. But the company has begun a new phase of model roll-outs and has a goal of 2 billion euros in savings by the end of next year, with one-third of that expected in 2013.
To boost deliveries, Mercedes is investing in new entry-level models such as the CLA four-door compact coupe and the A-class hatchback, as well as revamping its top-of-the-line S class with amenities like a hot-stone massage function in the rear passenger seats. The S class will hit European dealerships in the third quarter then roll out overseas in the fourth.
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."
First-half deliveries at the marque rose 6.4 percent to 694,433 cars and sport-utility vehicles, a record for the period, Daimler said on July 3.
Daimler stuck to a forecast that earnings in the second half of 2013 will be better than in the first half. The company will publish its full quarterly report on July 24.
Daimler also reaffirmed its full-year guidance. It said on April 24 it expected full-year EBIT from continued operations to be below last year's 8.13 billion euros, a level it had previously aimed to reach again this year.
No. 1 goal
Daimler CEO Dieter Zetsche has vowed that Mercedes will overtake BMW in global sales by the end of the decade after dropping to No. 3 behind Audi in 2011.
The Daimler Trucks division, the world's biggest maker of heavy vehicles, and the bus unit posted charges totaling 102 million euros for job cuts and other reorganization measures. Ebit at the truck business fell 17 percent to 434 million euros, while earnings at the bus operation were a positive 27 million euros versus a loss of 57 million euros a year earlier.
Zetsche, who also leads the Mercedes-Benz Cars division, sold Daimler's stake in EADS (European Aeronautic, Defence & Space Co.) in April to focus on the auto business.
Daimler's move to sell its EADS holding came after EADS shareholders approved changes in its ownership structure earlier this year, allowing Daimler to exit the company. EADS was formed in 2000 from the merger of several European aerospace companies, including Daimler's DASA. The German carmaker received a 30 percent stake after EADS' creation, scaling it down over time.
Reuters and Bloomberg contributed to this report