Daimler Lifts 2020 Profit Outlook As Mercedes-Benz Margins Rebound

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 per cent in the quarter, up from 7 per cent a year earlier and above the minus 1.5 per cent margin in the second quarter.

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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 per cent 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.