Daimler lifts 2020 profit outlook as Mercedes-Benz margins rebound

Key Points
  • Daimler expects full-year EBIT to reach 2019 levels.
  • Daimler expects deliveries of luxury cars to fall in 2020.
  • Margins at Mercedes-Benz rise thanks to China demand.
The windows at the corporate headquarters of Daimler AG in Untertürkheim are illuminated.
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German automaker Daimler raised its 2020 profit outlook on Friday as strong demand in China in the third quarter helped turn around margins at its Mercedes-Benz cars division.

Benefiting from improved pricing and a fall in fixed costs, adjusted return on sales at the company's Mercedes-Benz Cars & Vans division rose to 9.4% in the quarter, up from 7% a year earlier and above the minus 1.5% margin in the second quarter.

The car and truck maker said it now expected full-year earnings before interest and taxes (EBIT) to reach prior-year levels, compared with the previous expectation of a drop in earnings.

The company's adjusted EBIT rose to 3.479 billion euros ($4.11 billion) in the quarter, up from 3.14 billion euros in the year-earlier period.

However, quarterly deliveries of Mercedes Benz Cars and Vans were down 4% as the COVID-19 pandemic continued to weigh on demand, prompting Daimler to reiterate that it expects group unit sales and revenue in 2020 to be significantly lower than the previous year.