Shares in Daimler rose after the company solidified its lead in the luxury-car market and said it’s confident of reaching this year’s underlying profit goals, despite more than €1bn in one-time costs in the second quarter.
Adjusted earnings before interest and taxes rose 5.6% to €3.97bn in a preliminary tally, “significantly” beating analyst expectations, the automaker said.
Daimler benefited from gains in vans and buses while earnings dropped at the trucks and the Mercedes Cars division.
The result excludes almost €500m in Takata air-bag recalls as well as €400m for legal costs.
Locked in a race for luxury-market leader with BMW and Audi, Mercedes has been in the process of rejuvenating its fleet, including a new version of the business-focused E-Class sedan in March.
The carmaker was ahead of both rivals in sales through June.
Daimler shares rose almost 3% in Frankfurt.
The stock has lost over 26% this year, compared to a 7% drop in the benchmark DAX Index.
“The stronger than expected result was driven by the strong performance in the cars division,” said Arndt Ellinghorst, a London-based analyst with Evercore ISI who has a sell rating on the shares.
“Just when Brexit has increased macro risks and Daimler has just recently warned on its trucks outlook, Daimler delivers a material beat.”
Daimler’s legal challenges include a lawsuit in the US claiming its BlueTec diesel vehicles violate clean-air standards when run at cooler temperatures.
The carmaker declined to comment on whether the legal costs are linked to that suit, which it has called “baseless.”
Germany’s antitrust regulator raided Daimler’s offices last month in a probe of steel purchasing by the auto industry.
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