Mercedes car profits help offset Q3 trucks slump at Daimler

FRANKFURT: Falling demand for Daimler's trucks prompted the company to lower its revenue outlook for the year, taking the shine off a forecast-beating rise in third-quarter operating profit lifted by higher margins for Mercedes-Benz luxury cars.

Daimler on Friday warned it now expects group revenues to remain flat, retreating from a previous forecast which predicted a slight increase in revenue. However, full-year group profit (EBIT) remains on track to slightly exceed 2015 levels.

Shares were trading 1.5 percent lower at 1151 GMT, as analysts said the Stuttgart-based company's stock may have limited upside potential in an increasingly jittery market environment. "Daimler's turnaround of the Mercedes brand has been exceptional but we feel that this is well understood and leaves little room for positive surprises or indeed unrecognized earnings momentum," Arndt Ellinghorst, analyst at Evercore ISI, said in a note on Friday.

Swedish truckmaker Volvo on Friday forecast a slide in heavy-duty truck markets on both sides of the North Atlantic next year.

Daimler's earnings before interest and tax (EBIT), adjusted for special items, climbed to 4.01 billion euros ($4.37 billion) in the three months through September, above the 3.8 billion euros forecast in a Reuters poll mainly thanks to margin improvement at the Mercedes-Benz cars division.

Daimler said the EBIT at its Mercedes-Benz Cars division rose 23 percent, powered by an 11 percent increase in car sales after the launch of the new E-class and continued strong demand for sports utility vehicles.

The division's return on sales, adjusted for special items, rose to 11.4 percent. Mercedes wants to overtake German rival BMW to claim the title of biggest selling luxury carmaker.

However, Daimler Trucks and Daimler Buses could not match earnings from the same quarter last year, in part due to a sharp fall in demand in key markets like Brazil and North America.