RYCEY Rolls Royce Holdings PLC (PK)

BERLIN—Daimler AG said Thursday it is on course for strong growth in earnings this year after it made third-quarter net profit of €2.39 billion ($2.70 billion) on a 13% jump in revenue on robust sales of Mercedes-Benz cars.

Net profit was lower than the €2.74 billion recorded in the three months to end-September last year when Daimler, also one of the world's leading truck makers, booked an extraordinary gain of €1.01 billion related to the sale of a stake in an engine-making venture with Rolls-Royce Holdings PLC.

But the German auto maker did slightly better than analysts were expecting. Their average forecast was for net profit of €2.36 billion.

Revenue increased 13% to €37.28 billion as the company sold 18% more cars, amid a continuing rebound in sales in Europe and sturdy demand in North America. European automotive exporters like Daimler are also benefiting from the euro's weakness against the dollar.

The group's underlying performance was strong, with the profitability of Mercedes-Benz improving. The division's operating profit jumping by more than a third to €2.18 billion and the third-quarter operating profit margin improving to 10.5% from 8.5% in the same period last year.

Daimler's "[full-year] earnings before interest and taxes from ongoing business [is] expected to be significantly higher than in 2014," the company said.

Mercedes has an expanded model range and launched new versions of its cars in the past year which have helped sales in recent quarters. Daimler said the division's good earnings performance derived in part from "strong pricing" amid good demand for C-Class sedans and Mercedes sport-utility vehicles.

The German auto industry is under a cloud after Volkswagen AG's admission last month that it had cheated on emission tests for its diesel cars, though it is too early to judge the impact on sales. Cars are often delivered only weeks after a buyer has placed an order.

Mercedes-Benz ranks third behind BMW AG and Volkswagen's Audi AG unit among the world's biggest sellers of premium cars.

Write to Friedrich Geiger at friedrich.geiger@wsj.com

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(END) Dow Jones Newswires

October 22, 2015 03:55 ET (07:55 GMT)

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