Mercedes-Benz Sees Profit Double In First Quarter

The German group Daimler has registered an operating profit of 1.8 billion euros in the first quarter, increasing by nearly 2 times due to higher sales of Mercedes-Benz cars. 
The earnings before interest and taxes climbed by 95 percent in the first three months of this year, at 1.79 billion euros from 917 million euros in the corresponding period of the last year, according to data presented by the company, cited by Bloomberg.

The group’s revenue rose by 13 percent to 29.5 billion euros. The results have exceeded the estimates of financial analysts. Mercedes-Benz deliveries rose by 15 percent in the first quarter to 374 300 vehicles. The S-Class and the compact class models have been made noted by delivery increases of 71 percent and 28 percent.

Sales of BMW and Audi, Mercedes-Benz’s main rivals have climbed by 12 percent each in the period under review.

Daimler CEO Dieter Zetsche said: “We made a good start to this year, as expected. As the year progresses, we will continue working systematically on our profitable growth path.”

The introduction of new models, like the A-and B-class, GLA and CLA compact and the flagship S-class has led to increased profitability for the automotive division of Mercedes. The new model boosted showroom activity, which materialized in more than doubling sales from ongoing operations up to 7 percent in the first quarter of the year compared with the 3.3 percent in the same period, of the last year. In the medium term, Daimler said it aimed to increase that to 10 percent.
The 7 percent figure was smaller than some analysts foresaw and lagged behind the 10.1 percent of Audi.

“Margins were a little weaker than expected due to higher top-line growth and because of costs to roll out the revamped C-class sedan and the GLA compact SUV,” said Mike Dean, analyst with Credit Suisse.

For the auto division, which includes the Mercedes and Smart brands, deliveries in the first quarter rose 14 percent to a record 389,500 vehicles. Due to a more favorable model mix the revenue of the auto division increased by 21 percent, to 17 billion euros. EBIT (Earnings before interest and taxes) was 1,183 million euro, a significant increase from the 460 million euros a year earlier.

“The earnings development in the first quarter primarily reflects the ongoing growth in unit sales, especially in China and the United States,” Daimler said.
“These are exceptionally good numbers. The volume growth, especially in cars, and higher average prices have helped tremendously,” said Hans-Peter Wodniok, analyst with Fairesearch.

To regain the top position in global luxury-car sales, Mercedes made more deliveries in the first quarter than BMW and Audi. The higher growth involves rolling out 30 Mercedes models by the decade’s end, including about 12 new vehicles.

“Daimler’s rebirth and rehabilitation continues with these first-quarter results. This is supposed to be Mercedes’s weakest quarter of 2014 with the changeover of the C class, so it bodes well for the rest of the year,” said Max Warburton, Bernstein analyst.

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