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German automaker Daimler raised its 2020 profit outlook on Friday as strong demand in China in the third quarter helped turn around margins at its Mercedes-Benz cars division.
Benefiting from improved pricing and a fall in fixed costs, adjusted return on sales at the company's Mercedes-Benz Cars & Vans division rose to 9.4% in the quarter, up from 7% a year earlier and above the minus 1.5% margin in the second quarter.
The car and truck maker said it now expected full-year earnings before interest and taxes (EBIT) to reach prior-year levels, compared with the previous expectation of a drop in earnings.
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The company's adjusted EBIT rose to 3.479 billion euros ($4.11 billion) in the quarter, up from 3.14 billion euros in the year-earlier period.
However, quarterly deliveries of Mercedes Benz Cars and Vans were down 4% as the Covid-19 pandemic continued to weigh on demand, prompting Daimler to reiterate that it expects group unit sales and revenue in 2020 to be significantly lower than the previous year.