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Daimler Q1 Profit Nearly Doubles On Strong Sales - Update


German automotive major Daimler AG (DDAIF.PK) Friday said that its profit nearly doubled in the first quarter, reflecting the ongoing upward trend in all its divisions except Daimler buses. Top line rose 17 percent on the back of strong unit sales and revenue for Mercedes-Benz cars and vans and Daimler trucks in all major regions. The company also confirmed its EBIT outlook for 2011.

Net profit for the first quarter was 1.18 billion euros or about $1.75 billion, compared with 612 million euros last year. Earnings per share rose to 0.99 euros from 0.65 euros in the prior-year quarter.

In the first quarter, Daimler trucks and Daimler Financial Services have recognized costs of 49 million euros and 29 million, respectively, due to the earthquake in Japan.

Group revenue totaled 24.73 billion euros or $36.70 billion, an increase of 17 percent from 21.19 billion euros a year ago. Adjusted for exchange-rate effects, the revenue growth was 15 percent.

Daimler said it sold 461,742 cars and commercial vehicles in the first quarter, exceeding the prior-year quarter figure by 15 percent.

Mercedes-Benz cars sales increased 12 percent year-over-year, helped by the premium and luxury segments and SUVs, despite being affected by higher raw material prices. China posted a significant increase in unit sales due to its attractive product portfolio.

The company also recorded a 16 percent rise in the sales of Mercedes-Benz vans. Sprinter, Vito/Viano and Vario models delivered growth during the quarter. Continuing market recovery and strong unit sales, especially in Germany, China and Turkey resulted in earnings growth for the Mercedes-Benz vans business.

Daimler trucks sales grew 27 percent. Markets of Western Europe and the U.S. supported the division's earnings improvement.

Meanwhile, sales of Daimler buses dropped 8 percent in the quarter. Weak city-bus segment in Western Europe and North America, the absence of major orders that favored Latin American business last year and negative currency effects led to lower earnings for the division, the company noted.

Daimler Financial Services' revenue was 3.03 billion euros, a decline of 1 percent from 3.06 billion euros a year earlier. However, earnings improved year-on-year, driven by lower risk provisions and higher interest margins.

In addition, the company's share in the net result of EADS (European Aeronautic Defence and Space Company N.V.) amounted to a profit of 74 million euros, compared with a loss of 269 million euros last year. This loss was primarily due to provisions recognized by EADS relating to the A400M military transport aircraft.

Going forward, for 2011, Daimler continues to expect significantly higher EBIT from its ongoing business and revenue growth, and it anticipates a significant increase in total unit sales compared with 1.9 million vehicles in 2010.

The situation in the Japanese market is very difficult and hard to forecast due to the lack of clarity about future developments. However, Daimler trucks will strengthen its position in other parts of Asia, especially in China and other emerging markets, the company noted.

In addition, the company assumes that the worldwide number of employees will increase in 2011 due to strong demand for its products.

DDAIF.PK closed Thursday's trading at $79.20, up $0.58 or 0.74, on a volume of 94,602 shares.

On the XETRA exchange, the company's shares are trading at 52.30 euros, down 0.79 euros or 1.51 percent, on a volume of 202,367 shares.

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