FRANKFURT, Germany (AP) — German automaker Daimler saw net profit nearly double in the first quarter on strong demand across all major markets for its updated line of Mercedes-Benz luxury cars.
Daimler AG said Tuesday that its net profit during the period spiked to 2.05 billion euros ($2.23 billion) from 1.09 billion in the same quarter a year ago.
It credited its investment in renewing its model line, including a new C-Class sedan and an expanded range of smaller vehicles. Overall, it said, revenue rose 16 percent during the quarter to 34.2 billion euros with shifting currency exchange rates providing a further boost.
Daimler grew sales across all its major markets as the global auto sales market continues to expand, led by the United States and China. Europe is also making a contribution as the continent slowly heals from its crisis over government and bank debt.
Shares in the Stuttgart-based automaker rose 2.9 percent to 97.26 euros in morning trading in Europe. Analyst Max Warburton at Sanford C. Bernstein credited a "powerful product cycle" for the good earnings performance and pointed out a strong profit margin of 9.4 percent at Mercedes, up from 7 percent a year ago, as well as abundant cash flow.
Continually improving the model line is expensive and risky for carmakers, involving billions in investment several years before the new cars appear. But it's the key to profits and higher margins for the companies that get it right.
Daimler saw strong sales increases for Mercedes in the U.S., China, Japan, Western Europe, and Britain. It was also able to command stronger prices from customers especially in the U.S. and China. Globally, the Mercedes brand grew sales 18 percent to 459,700 vehicles, a record for the first quarter.
Chief Financial Officer Bodo Uebber said cost-saving efforts also shored up earnings.