FRANKFURT -- Automaker Daimler (DDAIF) nearly doubled net profit in the first quarter as its luxury Mercedes brand kept up its strong sales performance in China.
Earnings reached €1.18 billion ($1.7 billion), up from €612 million in the same quarter last year. Revenue rose 15% to €24.7 billion.
Earnings were up across the company's divisions, but most of the increase came from the mainstay Mercedes brand. Unit sales of its luxury cars and SUVs in China jumped by 82%, while Western Europe and the United States -- still far bigger markets for Daimler -- saw 4% increases.
Mercedes operating earnings rose 60% to €1.288 billion from a year ago, the bulk of the company's €2.03 billion in earnings before interest and taxes.The company sold 15% more cars and commercial vehicles than last year, at 461,700. Daimler's performance follows strong earnings in recent days from other automakers, who are benefiting from rising demand in emerging markets such as China and India, and from a continuing recovery in the United States. Demand is weaker in Western Europe, where Germany is booming but several other countries are suffering from debt crises, troubled government finances and flat growth. Ford (F) had its best first quarter in 13 years with $2.6 billion profit, while Volkswagen earned €1.7 billion on stronger sales in China, India, Mexico and Argentina. One risk factor for the industry was mentioned by Daimler in Friday's report: rising costs of raw materials, which the company said had had a negative effect on earnings. The issue was also cited by Ford Chief Financial Officer Lewis Booth. For now, a strengthening if uneven global economy continues to boost Daimler and the industry. Mercedes truck division -- whose products represent big-ticket investment decisions by logistics and delivery companies and are therefore sensitive to the ups and downs of the economy -- showed a big improvement, raising operating earnings to €415 million from €130 million in the same quarter a year earlier. "We achieved excellent earnings in the first quarter," CEO Dieter Zetsche said in a statement. "This puts us well ahead of our planning and confirms our positive outlook for 2011."