July 23, 2020 / 5:29 AM / 12 days ago

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

FRANKFURT (Reuters) - Daimler (DAIGn.DE) 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 (1.53 billion pounds).

“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.

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

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