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Daimler's first quarter earnings surge on Merc sales success

Munich - Daimler’s first-quarter profit almost doubled as surging demand for Mercedes-Benz cars like the new E-Class sedan generated delivery growth at triple the rate of luxury-vehicle competitor BMW.

Earnings before interest and taxes climbed to €4bn from €2.15bn a year earlier, Stuttgart, Germany-based Daimler said in a statement late on Tuesday, citing preliminary figures.

The earnings included a total of €690m of special items, such as revaluation of stakes in mapping business HERE and Chinese partner BAIC Motor. Daimler stock rose the most in 3 1/2 months.

Profit at the Mercedes-Benz Cars unit jumped 60% from a year earlier to €2.24bn, and the maker of the S-Class sedan sold 16% more cars. That compared with BMW’s delivery growth of 5.3% for the period.

Daimler has been reaping the benefits of a revamp of its product line-up with a sportier look and the addition of sport utility vehicles like the GLC coupe. That effort helped Mercedes unseat German arch-rival BMW from the top spot in luxury-car sales last year.

"Daimler is off to a strong start in 2017," Georges Dieng, a Paris-based analyst for Natixis wrote in a note.

"The impressive performance is however mainly driven" by a number of positive one-offs, he said, adding that excluding special items the profit the company’s result was "very solid."

Daimler rose as much as 2.8% to €68.50, the steepest intraday jump since December 8, and was trading up 2.2% at 9:15 in Frankfurt.

Earnings at the heavy-truck unit, the world’s biggest, also advanced, as the Mitsubishi Fuso Truck & Bus unit in Japan recorded a €267m gain from selling real estate. The business struggled last year with declining demand and profits.

Last week, Daimler concluded talks with worker representatives for additional cost cuts that’ll also reduce headcount.

Daimler will report full quarterly financial figures on April 26. The preliminary earnings were released early after recording a "significantly better" result than market expectations, Daimler said.

The automaker plans at the Shanghai auto show next week to unveil a refreshed version of the Mercedes S-Class, its flagship model and one of its main profit contributors.

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