UPDATE 1-Daimler Q1 profits up as sales of Mercedes compact cars rise

* Margins at Mercedes-Benz Cars more than double

* Daimler sees significant growth in sales and revenue

* Reiterates sees significantly higher EBIT this year

* Shares indicated up 1 percent, top DAX gainer

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FRANKFURT, April 30 (Reuters) - Daimler's adjusted first-quarter operating profit more than doubled thanks to a 14 percent rise in sales of Mercedes-Benz cars, which saw margins shoot up due to a raft of new cars and demand in China and the United States.

The German carmaker said on Wednesday group earnings before interest and tax (EBIT) from ongoing business rose to 2.07 billion euros ($2.9 billion) in the three months ended March, up from 949 million euros in the year-earlier period, and above the 1.906 billion forecast in a Reuters poll.

Sales of cars, buses and trucks rose 13 percent in the first quarter.

Dieter Zetsche , Chairman of the Board of Management of Daimler and Head of Mercedes-Benz Cars, said: "We made a good start to this year, as expected. As the year progresses, we will continue working systematically on our profitable growth path."

Profitability at Mercedes-Benz Cars has improved as a range of new cars including the A- and B-Class compact cars as well as its flagship S-Class hit showrooms, more than doubling the division's return on sales from ongoing operations to 7 percent in the quarter, up from 3.3 percent in the year-earlier quarter.

Daimler said it aimed to increase that to 10 percent in the medium term.

The company reiterated it saw significantly higher EBIT from ongoing business this year.

The Stuttgart-based automaker's first-quarter results stand in sharp contrast to last year, when Daimler warned it might have to cut its profit expectations only nine weeks after it had reported full-year results, blaming a slump in car sales.

In February this year, Daimler said it expected group EBIT to increase "significantly" in 2014 from the 7.9 billion euros it reported for last year.

Furthermore it said it saw significantly higher sales at Mercedes-Benz Cars than the 1.566 million cars it sold in 2013.

($1 = 0.7237 Euros)

(Reporting by Edward Taylor; Editing by Victoria Bryan and Mark Potter)