Thu, Jul 28, 2011 - Page 10 News List

Mercedes cars help Daimler beat expectations in Q2

AP, FRANKFURT,GERMANY , and DEARBORN, MICHIGAN

Automaker Daimler AG turned in another strong quarter on Tuesday as four of its five divisions recorded higher earnings and the luxury Mercedes brand posted record profits.

Overall net profit was up a higher than expected 30 percent at 1.7 billion euros (US$2.5 billion) from 1.3 billion euros a year ago, while revenues rose 5 percent to 26.3 billion euros.

Mercedes did particularly well, posting its strongest quarter ever with operating earnings rising 14 percent to 1.56 billion euros.

The company said this year would turn out better than expected and that operating earnings would “very significantly exceed” last year’s results.

Earnings of 1.51 euros a share in the second quarter outstripped expectations of 1.43 euros.

Daimler and German competitors BMW AG and Volkswagen AG have turned in strong earnings in recent quarters thanks to rapidly rising demand in emerging markets such as China, along with the recovery in sales in the US.

“With our excellent first half of the year, we are fully on schedule to turn 2011 into one of the most successful years in our long corporate history,” said CEO Dieter Zetsche, who also heads the Mercedes division.

As well as a strong performance in the Mercedes Benz Cars division, earnings were also up at the company’s separate truck, Mercedes van, and financial services divisions. Only its bus-making operation showed lower profits, but still made 61 million euros. Zetsche said the company could do still better.

“We’re not in the highest gear,” he said. “We can do more.”

In the US, Ford Motor Co’s ambitious plans to grow in Asia took a toll on its second-quarter profit, with higher costs to design and sell cars offsetting rising sales. The company’s net income fell 8 percent to US$2.4 billion for the period from April through last month.

Ford blamed higher prices for steel and other commodities, but also said that after years of restructuring, the company is strong enough to spend heavily on future growth. Ford spent US$400 million more on engineering and advertising new vehicles than a year earlier.

Rival Chrysler Group also took a hit, reporting a loss of US$370 million in the quarter. Chrysler said the loss was a sign of a healthier balance sheet. Without a US$551 million accounting charge for refinancing bailout debts to the US and Canadian governments, Chrysler would have earned US$181 million.

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