Daimler Raises 2010 Forecast; Shares Rise 7.4%
BERLIN - Daimler AG rose to its highest price in 1.5 years in Frankfurt trading after the world's second-biggest maker of luxury vehicles lifted profit forecasts for the car and truck units, Bloomberg reported. Mercedes-Benz Cars will post operating profit of 2.5 billion euros ($3.4 billion) to 3 billion euros this year, the Stuttgart-based company said in a statement late yesterday. Daimler projected in February its biggest unit, which makes Mercedes, Smart, and Maybach passenger cars, would earn more than 1.5 billion euros. CEO Dieter Zetsche is striving to close the gap with luxury market leader BMW AG. Daimler reported better-than-expected earnings in the first quarter on sales of its high-end E-Class and S-Class vehicles and a “favorable overall cost position,” it said. “It's good news for Daimler, but this is a lesson in how not to communicate with the market,” said Mike Tyndall, a European autos specialist with Nomura Securities in London. Daimler surged as much as 7.9 percent to 39.17 euros, the highest price since Sept. 26, 2008. Daimler closed the day up 7.4 percent to 39 euros. The company's shares dropped as much as 9.4 percent on Feb. 18 after announcing an unexpected fourth-quarter loss, a dividend cancellation and a conservative profit outlook. The company's trucks division will likely make a profit of 500 million euros to 700 million euros this year. Daimler previously targeted operating profit of about 200 million euros for the unit, which makes Mercedes, Freightliner and Fuso heavy- duty vehicles.
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