Mercedes-Benz parent Daimler AG reported a 2% increase in third-quarter earnings per share, beating analyst expectations, helped by increased sales of Mercedes-Benz cars and vans.
The German premium automaker posted July 1 to Sept. 30 earnings per share of €1.61, up from €1.58 in the same period of 2018 and above the €1.54 forecast by five analysts polled by S&P Global Market Intelligence.
Revenue rose 8% to €43.27 billion compared with €40.21 billion in the same period last year, the company said in an earnings release, exceeding analysts' mean consensus estimate of €42.98 billion.
"Strong sales at Cars and Vans supported our Q3 financial performance. However, in order to master the transformation in the next few years, we need to increase our efforts considerably: We have to significantly reduce our costs and consistently strengthen our cash flow," CEO Ola Källenius said in the earnings release.
Operating profit or EBIT grew 8% to €2.69 billion in the period. Mercedes-Benz cars contributed €1.42 billion, a 4% increase in EBIT; Daimler Mobility rose 5% to €413 million, and the vans business swung to a €113 million operating profit from a €93 million loss. EBIT at Daimler Trucks fell 9% to €774 million.
The company continues to expect full-year operating profit to be "significantly below" 2018 levels, cutting anticipated return on sales for Daimler Trucks to 6% to 8% as the company expects commercial vehicle demand to be hit by a faster-than-expected downturn in U.S. and Europe.
For 2019 as a whole, Daimler said it continued to expect stable sales volumes and a slightly higher revenue compared with the previous year, with a significant increase in revenue at Daimler Buses.
Daimler said free cash flow of the industrial business was burdened by high levels of spending to develop new products and technologies and said it expected free cash flow in this area to be "significantly lower" in the 2019 financial year.
The automaker said the resolution of legal proceedings in connection with diesel exhaust emissions may "negatively affect the profitability expectations."
Shares in Daimler rose as much as 6.4% to €53.65 during morning trading in Frankfurt following the announcement of the results.