BERLIN (Reuters) -- Daimler said first-quarter operating profit surged 41 percent on the effects of new model launches and record sales of Mercedes-Benz cars.
Overall adjusted group earnings before interest and tax (EBIT) jumped to 2.93 billion euros ($3.19 billion), the company said in a statement today.
The return on sales from ongoing business at Mercedes-Benz Cars came in at 9.2 percent, up from 7 percent in the first quarter last year, lifted by record deliveries of its passenger cars. Daimler CEO Dieter Zetsche has a goal for Mercedes, the world's third-biggest maker of luxury vehicles, to overtake premium-industry leaders BMW and Audi in sales by the end of the decade and boost profitability to 10 percent of revenue.
Daimler said record deliveries last month in Europe, China and the United States drove up quarterly passenger car sales to 459,708 models, exceeding last year's high by 18 percent.
"Our growth strategy, our product offensives and our efficiency programs are paying off," Zetsche said in the statement. "We have already achieved a lot, we look to the future with great confidence, and we aim to achieve even more."
Daimler reiterated it expects significant growth in revenue, EBIT and unit sales from ongoing business this year. The automaker said it plans to invest 25 billion euros in developing models and building plants through 2016.
Analysts said sales momentum will continue with recent and forthcoming model launches. Mercedes is pushing a raft of SUVs this year, including the all-new GLE coupe and the GLC model, successor to the GLK compact SUV.
"Mercedes remains in a sweet spot, with improving product meeting firming pricing and a more efficient cost base," said Stuart Pearson, an analyst with Exane BNP Paribas.
Bankhaus Metzler's Juergen Pieper said: "Sales as well as earnings clearly beat expectations and Daimler delivered a very strong result across the board, including at its truck and van units. The investment program shows they're keen to continue on this path."
Divisional gains
The rollout of a new version of its top-selling C-class sedan helped the Mercedes-Benz Cars unit to raise earnings. First-quarter EBIT at the division, which also includes the Smart city-car brand, jumped 56 percent to 1.84 billion euros.
Quarterly EBIT at the Mercedes-Benz Cars division, which also includes the Smart city-car brand, jumped 56 percent to 1.84 billion euros. The Daimler Trucks unit, which builds Mercedes and Freightliner commercial vehicles, posted a 38 percent increase in EBIT to 472 million euros. Earnings at the Mercedes-Benz van business surged 75 percent to 215 million euros.
"We are approaching our profitability targets step by step, for all divisions," Chief Financial Officer Bodo Uebber told journalists on a conference call today. "We are getting much closer to reaching our strategic target" at Mercedes-Benz Cars, he said.
Daimler is the first of Germany's three luxury automakers to publish quarterly earnings, with some analysts concerned that slowing Chinese economic growth could curb a major source of demand in recent years.
Rivals BMW and Audi are due to release results next week.
Bloomberg contributed to this report
