FRANKFURT, Germany (AP) — German automaker Daimler AG saw net profit rise 53 percent in the third quarter thanks to a stronger performance from its Mercedes-Benz luxury brand, which benefited from demand for its small cars.
The company said Thursday that net income rose to 1.90 billion euros ($2.6 billion) from 1.24 billion euros in the same period a year ago. Revenue rose 5 percent to 30.1 billion euros. Daimler said an expanded range of compact cars helped boost sales. Sales for its smaller A-Class, B-Class and CLA model rose by 90 percent in the quarter to 97,200. Demand for the A-Class was so strong that the company had to farm out additional production to Finland's Valmet Automotive.
The Mercedes division, the company's main earnings pillar, saw vehicle sales rise 14 percent to a record 395,000 in the period, which helped operating earnings increase by 23 percent to 1.20 billion euros. Demand from China made a big contribution as Mercedes sold 38 percent more vehicles there during the quarter.
The company said its factories were using most of their capacity and would add special production shifts during the rest of the year. CEO Dieter Zetsche said in a statement that "this shows the high investments we have made were money well spent."
The company said its operating earnings would rise in the coming quarter compared to a year ago as sales and profits benefit from the rollout of the new version of its large S-Class luxury sedan. The S-Class has higher profit margins than the small cars and should provide more support for earnings.
The company is bouncing back from subpar earnings earlier this year due to troubles with its distribution network in China. In April, it abandoned its profit forecast and said that this year's operating earnings would not equal last year's €8.1 billion. On Thursday, the company said it would now make 7.5 billion euros in operating earnings for all of this year.
Daimler shares rose 2.7 percent to 59.92 euros in morning trading in Europe.