July 23, 2020 / 5:27 AM / 18 days ago

Daimler flags recovery signs, sees Mercedes-Benz EBIT rising this year

FRANKFURT (Reuters) - Daimler on Thursday flagged signs of recovering demand for top-end Mercedes-Benz models and electric vehicles, sending its shares higher.

FILE PHOTO: A logo of Mercedes-Benz is seen outside a Mercedes-Benz car dealer, amid the coronavirus disease (COVID-19) outbreak in Brussels, Belgium May 28, 2020. REUTERS/Yves Herman/File Photo

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 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.

($1 = 0.8630 euros)

Reporting by Edward Taylor; editing by Riham Alkousaa and Jason Neely

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