Mercedes-Benz Sees Higher Earnings

Daimler AG (DAI ), the owner of Mercedes-Benz brand, has revealed that earnings before interest and taxes (EBIT) from the division will exceed the same in the first quarter of 2010. In the first quarter, the division had an EBIT of €806 million ($1.12 billion) in contrast to minus €1.1 billion ($1.5 billion) a year ago. For the full-year 2010, the company expects to generate an EBIT that will be at the upper end of its previous forecast of €2.5 billion to €3 billion ($3.5 billion to $4.2 billion).

Last month, sales of Mercedes-Benz Cars rose 12%. Deliveries of E-Class sedans surged 52%, S-Class sedans hiked 7% and C-Class went up 8%.

Daimler expects a higher return on sales in the division compared with 7% in the first quarter of 2010. Previously, the company had anticipated strong demand in the division with the launch of the new generation of the smart fortwo (electric) model in the third quarter of 2010. The company is also confident about maintaining its targeted return on sales of 10% in the second half of 2012 until full-year 2013.

Dr Dieter Zetsche, chairman of the board of management of Daimler AG and head of Mercedes-Benz Cars, has considered China as the most increasingly important market for the company. The country ranked third in terms of global sales after Germany and the U.S. The division expects a sales growth of 50% in the country to more than 100,000 vehicles this year.

In the first quarter of the year, Daimler AG showed a profit of €612 million ($850 million) or 65 eurocents (90 cents) per share in sharp contrast to a loss of €1.3 billion ($1.8 billion) or €1.40 ($1.95) per share in the prior-year quarter. The hefty gain in profit was fueled by an impressive rise in unit volumes in all the divisions, especially Mercedes-Benz Cars.

Revenues in the Mercedes-Benz Cars division were strongly influenced by sales growth in its E-Class and S-Class models. Unit sales went up by a robust 20% to 277,100 vehicles, helped by strong sales in China and the U.S. This has led revenues to grow 28% to €11.6 billion ($16.1 billion), supported by an improved product mix and pricing.