Daimler shares boosted 4.5% on Friday after the German luxury automaker posted forecast-beating third-quarter results, rallied by a better-than-expected recovery in sales of luxury cars in September.
European car registrations increased slightly in September, the first increase this year, industry data revealed on Friday, suggesting a recovery in the automobile sector in some European markets where coronavirus infections were lower.
Swedish truckmaker AB Volvo also posted third-quarter core revenues well above forecasts due to an increase in orders.
Daimler’s third-quarter earnings prior to interest and tax reached 3.07 billion euros ($3.59 billion), it said on Thursday, beating the 2.14 billion euro Refinitiv consensus.
The automaker is set to publish more financial data on October 23 and said it will post updated guidance for the whole year at that time.
Analysts had expected premium automakers to experience an advantage from a recovery in demand and welcomed Daimler’s strong cash flow during the quarter.
The coronavirus crisis had led to a decline in sales, pushing the company to operating losses in the first and second quarters.
To deal with the losses, Daimler’s Mercedes-Benz has stopped building sedans in the United States to focus on more profitable SUVs, together with its fuel cell development with Volvo Trucks, and stopped an automated development alliance with BMW.
Earlier this month, Daimler said it will slash fixed costs, capex, and research and development spending at Mercedes-Benz by more than 20% by 2025 as part of a strategy overhaul to take the brand further upmarket.
The move will see Mercedes-Benz, presently the world’s top-selling premium car brand, turn its back on a decades-old strategy of chasing sales volume to concentrate on the industry’s most profitable sectors: limousines and sport-utility vehicles.