Daimler proves attractive to buyers as Q3 earnings beat estimates

Shares of Daimler jumped to the highest in almost six years after the Stuttgart, Germany-based automaker reported a 16% increase in third-quarter earnings before interest and taxes to 2.23 billion euros ($3.08 billion), beating the 2.09 billion-euro average estimate of 11 analysts.

Net profit reached 1,897 million euros compared to last years 1,238 million euros. Earnings per share were 1.72 euros up from 1.06 euros for the same quarter in 2012. Mercedes-Benz Cars, including the Smart mini-car brand, posted a third-quarter operating margin of 7.3%, higher than the year-earlier figure of 6.4% and better than in the first half. Third-quarter group revenue at Daimler, also the world’s largest maker of heavy-duty trucks, gained 5.3% to 30.1 billion euros.

“This shows that the high investments we have made were money well spent,” Chief Executive Officer Dieter Zetsche said in a statement today. “We will continue to invest in products and production sites.”

The gains in the car-maker’s nine-month deliveries exceeded those at BMW and Volkswagen’s Audi.

Mercedes, the world’s third-largest luxury brand, is experiencing a boost in popularity as the four-door CLA, A-Class hatchback and van-like B-Class compact lineup surpassed production capacity.

Six months ago Mercedes started selling a new upgraded E-Class, a sedan that competes with BMW’s 5-Series and Audi’s A6. A new version of the flagship S-Class, the most expensive Mercedes sedan, came to market in July. The automaker has more than 30,000 orders for the revamped flagship model, Chief Financial Officer Bodo Uebber told reporters today.

According to Daimler, worldwide demand for cars is likely to expand by about 3% this year. This growth will primarily be driven by ongoing strong increases in demand in the United States and China.

In August, Daimler stated intentions to invest 2 billion euros which will result in doubling local production to more than 200,000 vehicles. Daimler expects the purchase of a 12% stake in Beijing Automotive Group Co.’s auto division to close before the end of the year, companys CFO said. Mercedes along with BAIC, as the Chinese company is known, already operate factories together making the German brand’s C- and E- Class sedans and GLK SUV.

The current consensus among 33 polled investment analysts is to buy stock in Daimler AG. The car-manufacturers stock has advanced more than 46% year-to-date.