Daimler AG (DDAIY) reported a blow-out third quarter thanks to a strong U.S. Markets and a big, trend-bucking rise in sales in China.
The Stuttgart, Germany-based maker of Mercedes-Benz cars said revenue rose 10% from a year ago to €33.1 billion ($xx billion) and net profit rose nearly 50% to €2.8 billion, boosted in particular by its new range of C-class vehicles, which launched in the U.S. And China in August.
The quarter was the company’s strongest-ever in terms of sales and revenue, with sales in Europe holding up despite the economic slowdown, and despite a double-digit percentage drop in sales in Russia.
In a somewhat paradoxical earnings release, chief executive Dieter Zetsche did say in the earnings release that “we are growing profitably and look to the future with optimism also beyond the full year…We are confident that we will achieve the targets we have set on a sustained basis.”
Yet the company was far from exuberant about the outlook for the economy in general, predicting a “rather difficult” fourth quarter and saying that “available leading indicators currently do not suggest that a sustainable improvement can be expected by the end of the year.”
The company also raised hopes for an increase in its dividend, as its net cash pile rose to €17.9 billion–that’s now up by over €4 billion since the start of the year. In addition to the money it’s making from operations, the company also raised €1 billion by selling its stake in Rolls Royce Power Systems, and since the end of the quarter, it has also announced the sale of its stake in Elon Musk’s Tesla Motor Inc. (TSLA), a move that analysts say will bring it a €600 million windfall. In a conference call, chief financial officer Bodo Uebber said there were no major acquisitions on the radar.
The company’s shares in Frankfurt fell slightly by lunchtime on Thursday, though, with analyssts disappointed by the fact that the company still isn’t as profitable as a luxury carmaker should be. Mercedes’ return on sales rose to 8.6% from 7.6% a year earlier, but that’s some way behind 11.7% at BMW AG and 9.9% at Volkswagen AG’s Audi brand.