FRANKFURT, Germany – Automaker Daimler AG says it nearly doubled net profit in the first quarter as its luxury Mercedes brand kept up its strong sales performance in China.
Earnings reached euro1.18 billion ($1.7 billion), up from euro612 million in the same quarter last year. Revenue rose 15 percent to euro24.7 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 percent, while Western Europe and the United States — still far bigger markets for Daimler — saw 4 percent increases.
Mercedes operating earnings rose 60 percent to euro1.288 billion from a year ago, the bulk of the company's euro2.03 billion in earnings before interest and taxes.
The company sold 15 percent 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 Motor Co. had its best first quarter in 13 years with $2.6 billion profit, while Volkswagen earned euro1.7 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 CFO 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 euro415 million from euro130 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."
Company shares traded up initially, then slipped 1 percent to euro52.54 in morning trading in Germany.
The company said it took one-time charges to reflect the disruption from Japan's earthquake and nuclear disaster, writing down euro49 million at Daimler Truck — whose Mitsubishi Fuso unit is based in Japan — and euro29 million at Daimler Financial Services.
FRANKFURT (AFP) – German retail sales marked the biggest monthly drop in March since January 2009, provisional adjusted data showed on Friday reflecting the dampening effect of rising prices on shoppers.
Sales in Germany, the biggest economy in the European Union, plunged by 2.1 percent, the seasonally adjusted figures showed.
On a 12-month basis the drop was an even stronger 3.5 percent, the national statistics office said.
Analysts polled by Dow Jones Newswires had expected a month-on-month decline of just 0.4 percent in March, and the statistics office told AFP that the drop was the strongest since a fall of 3.2 percent in January 2009.
Goldman Sachs economist Dirk Schumacher noted that the volatile sales data was subject to strong revisions however, and that it was thus "difficult to say much about the March figure."
Monthly retail sales had fallen by 0.4 percent in February, according to final figures which were revised slightly lower by the Destatis office from its initial estimation of minus 0.3 percent.
The picture was only slightly brighter in nominal terms, with a monthly decline of 1.8 percent in March and an annualised loss of 2.0 percent.
Sales of food, drink and tobacco fell by 4.8 percent from March 2010 on an adjusted basis, while non-food sales fell were down by 2.4 percent, Destatis said.
Economists and German officials have forecast a pick-up in consumption as the employment picture brightens, and hope it will provide a second driver of growth alongside German exports.
On Thursday, the Federal Labour Agency said that unemployment had declined again in April and was hovering around the lowest level in about two decades at 7.1 percent of the workforce.
But a rebound in economic activity and ultra-low interest rates have also seen inflation pick up this year in Germany, hitting 2.4 percent this month according to official data released on Wednesday.
The European Central Bank's inflation target is just below 2.0 percent.
Inflation, along with the natural disaster in Japan and unrest in North Africa and the Middle East have left German consumers unsettled, the GfK economic research institute said Wednesday.
Its household confidence indicator for Germany is set to fall to an indexed 5.7 points in May, following a drop in April that was the first for 10 months, from a three-year high of 6.0 in March.
Berlin nonetheless expects the economy to grow by 2.6 percent this year, one of the strongest rates in the 17-nation eurozone, as German exporters benefit from growth in emerging economies.
Schumacher noted that "business sentiment among retailers remains very high and the strength of the labour market also points to solid growth in consumer spending.
The March figure could eventually be revised upwards therefore, he said.
PARIS (AFP) – French oil group Total raised first-quarter adjusted net profit by 35 percent to 3.1 billion euros, boosted by high oil prices, the company said on Friday.
The outcome was slightly higher than the figure expected on average by analysts polled by Dow Jones Newswires who had expected a figure of 3.06 billion euros.
Sales rose by 22.0 percent to 46.03 billion euros.
Total is the biggest company by capitalisation on the French CAC 40 index.
Net profit after payments to minority interests rose by 51.0 percent to 3.9 billion euros.
Total, in common with other oil groups, has benefited from a surge of oil prices caused in part by unrest in the Middle East and North Africa. In the first quarter the price of a barrel of Brent quality North Sea oil was $105.4, or 38.0-percent higher than the average in the same period of last year.
But Total said that its production of hydrocarbons fell by 2.3 percent from the figure 12 months earlier to 2.371 million barrels a day. The group has targeted stable production for the whole of this year.
The fall of output reflected mainly the rise in the price of oil. In some countries, Total has to reduce output when prices rise.
Unrest in Libya reduced production by Total by 0.5 percent in the quarter.
Total said: "Group production continues to be affected by the halt of output in Libya which accounts for about 2.0 percent of group production in a full year."
In the refining sector, the volume of crude oil processed rose by 1.0 percent but margins fell by 17.0 percent.
But the group made an operating profit on these activities of 276 million euros, an increase of 78.0 percent, owing to improved use of refineries in Europe.
Activity in the first quarter of last year had been constrained by technical problems and strikes, the company recalled.
In the chemical sector, operating profit rose by 70.0 percent on improved trading conditions.
Total said that this year it would complete a programme of divestments totalling about $10.0 billion.
These divestments, alongside acquisitions made recently, asserted the group's strategy of redirecting activities while maintaining strong finances, the firm said.
Overnight, Total said that it was making a friendly bid of $1.38 billion for the US maker of solar panels SunPower in order to become a world leader in the field of solar energy.