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Daimler flags recovery signs, sees Mercedes-Benz EBIT rising this year
Published Jul 23, 2020 01:19AM ET
Updated Jul 23, 2020 06:40AM ET
© Reuters. Ola Kaellenius, CEO of German luxury car manufacturer Daimler AG, speaks at the annual results news conference
FRANKFURT (Reuters) - Daimler (DE:DAIGn) on Thursday flagged signs of recovering demand for top-end Mercedes-Benz models and electric vehicles, sending its shares higher.
CEO Ola Kaellenius said its Mercedes-Benz cars and vans division appeared set for a rise in 2020 operating profit.
"We are now seeing the first signs of a sales recovery especially at Mercedes-Benz passenger cars," Kaellenius told journalists on a call.
"I see the strongest growth in the upper end of the segments where we are active," he said.
Daimler shares were up 5.5% at 41.32 euros at 1028 GMT versus a German blue-chip DAX index just 0.6% higher.
The share rise came as Daimler confirmed second-quarter results it pre-released last week, including revenue down 30% and an EBIT loss of 1.68 billion euros ($1.95 billion).
"This share move is partially due to the relief that things are not getting worse, and maybe there is also a bit of Tesla (NASDAQ:TSLA) euphoria at work," Nord LB analyst Frank Schwope said.
Mercedes engineers helped Tesla develop its electric cars.
On Wednesday the U.S. electric carmaker posted a fourth consecutive quarterly profit, making it eligible to join the largest stock index, an expectation which has helped boost its shares by 500% this year.
Kaellenius is leading a cost-cutting drive to improve profitability as the pandemic hits sales and is also taking aim at production of high-margin models.
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