Mercedes Second-Quarter EBIT Rises 74%, Ups Margin Target
DaimlerChrysler's premium auto division Mercedes Car Group boosted second-quarter earnings before interest and tax (EBIT) 74% to 1.20 billion euros ($1.66 billion), the world's fifth-biggest carmaker said on Wednesday, beating market expectations.
With revenue flat at 12.558 billion euros, the Mercedes EBIT margin of nearly 9.6% in the quarter easily surpassed its minimum 7% target for 2007.
Analysts polled by Reuters had expected a Mercedes EBIT of 1.01 billion euros in the quarter.
It said it aimed to have a 10% return on sales at Mercedes by 2010 at the latest.
EBIT at the group's market-leading trucks business posted a surprise increase of 3% to 601 million euros despite sharp slowdowns in the North American and Japanese markets.
Revenue at the division fell 19% to 6.93 billion euros.
DaimlerChrysler shares rose 3% to 67.72 euros. They trade at about 13.8 times estimated 2008 earnings per share, a sharp premium to arch-rival BMW's 10.4 times, according to Reuters Estimates data.
The carmaker will not release full second-quarter results until Aug. 29 while it moves forward with the sale of a majority stake in U.S. arm Chrysler Group to Cerberus Capital Management.
DaimlerChrysler forecast in May that 2007 group EBIT would rise to 7 billion euros excluding the impact from selling Chrysler, a deal that breaks up a failed $36 billion transatlantic car merger struck in 1998.
Mercedes Car Group -- which includes the premium Mercedes-Benz, luxury Maybach and Smart minicar brands -- had generated a 6.6% operating margin in the first quarter, a period which it had signaled would be weak.