Carmaker revs up forecasts after powerful first quarter

The German firm's net profit doubled between January and March compared with the first quarter last year.

German carmaker Daimler has enjoyed a roaring start to the year

At 2.7 billion euros ($2.95 billion), the German firm's net profit doubled between January and March compared with the first quarter last year, on revenues up 11 percent at 38.8 billion euros.

Analysts had forecast significantly lower net profit of 2.4 billion euros.

"We started 2017 very well and managed to follow up on a record year in 2016," finance chief Bodo Uebber told journalists in a teleconference.

Operating or underlying profit before interest and taxes was up 87 percent compared with the start of 2016, at just over 4.0 billion euros -- a figure Daimler revealed earlier this month in preliminary results.

The carmaker had a number of windfall gains that had a positive impact on its profits, including a 183-million-euro payout from its investment in high-tech mapping firm Here after new investors climbed aboard alongside rivals BMW and Audi.

Other one-off boosts to the bottom line came from favourable exchange rates, the sale of property in Japan, and 240 million euros received after an investment in China's BAICMotor was cancelled.

Looking ahead to the full year 2017, Daimler expects to increase revenue and operating profit "significantly," contrasting with an earlier forecast of only a slight increase.

Daimler's success was powered by a 14-percent rise in sales of its Mercedes-Benz and Smart cars, which account for more than half of its revenue.

The Stuttgart-based firm last year overtook Munich rival BMW to become the world's largest luxury car manufacturer by unit sales.

On road to new record?

Mercedes buyers were snapping up a revamped E-Class and the manufacturer's range of SUVs in the first quarter this year.

By contrast, the group's trucks division continued to struggle with headwinds in significant markets, including Turkey, North America and Brazil, seeing sales fall by 11 percent.

Daimler is "on the path to a new record for the whole year," analyst Frank Schwope of Nord/LB bank commented.

"Given the increase in sales figures for the first three months of 2017, the lift in the forecasts is not especially surprising," he continued.

By 0950 GMT, Daimler shares had lost 0.45 percent in Frankfurt trading to reach 68.39 euros ($74.53), while the DAX index of leading German shares was almost flat.

The historic carmaker has not escaped the suspicions around diesel vehicles' emissions hovering around the industry, as both US authorities and Stuttgart prosecutors are investigating whether its cars emitted higher levels of pollutants than allowed.

Daimler did not rule out facing heavy financial penalties from the probes in its quarterly report.

Competitor Volkswagen has already set aside more than 20 billion euros to cover the costs of the scandal, after admitting in September 2015 to installing software to hide high emissions from regulators in 11 million cars worldwide.


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