Daimler AG made an official statement today that cash flow from its industrial operations increased by about 80% over the third quarter in the fiscal year, as its Mercedes-Benz Cars division posted larger earnings.
Frank Biller, an analyst at LBBW, commented for Bloomberg: “The results are significantly better than expected. This shows that fears of a profit warning that weighed on the stock over the last weeks were unfounded.”
The Germany-based third-largest luxury cars manufacturer and the largest heavy trucks maker, revised its cash flow projection for 2014, as industrial operations generated about 2.9 billion euros ($3.7 billion) during the third quarter of the year. The company had previously projected that free cash flow from its manufacturing businesses would be considerably lower this year compared to last year’s 3.2 billion euros.
Daimler also stated that the earnings before interest and taxes of its Mercedes-Benz unit increased from €1.25 billion in Q3 last year, to €1.61 billion in Q3 2014. The trucks unit of the company posted a 17% increase of its Q3 operating profit to €618 million.
As reported by Reuters, a local trader commented: “Finally some good news.”
The company has recently invested in new models and technology for its Mercedes-Benz brand under the lead of its Chief Executive Officer Dieter Zetsche. The company is also trying to reduce its expenses in order to boost margins at its biggest division, which is seeking to dethrone its competitor BMW as the biggest seller of luxury cars in the world by 2020.
Daimler AG added 4.07% to trade at €59.01 per share by 13:41 GMT, marking a one year increase of 1.39%. The company is valued at €60.66 billion. According to the Financial Times, the 30 analysts offering 12-month price targets for Daimler AG have a median target of €75.00, with a high estimate of €86.00 and a low estimate of €54.00. The median estimate represents a 32.28% increase from the last price of €56.70.
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