The German automaker Mercedes-Benz reported a slump in quarterly profit on Wednesday but reaffirmed its outlook for the full year as sales of its top-end cars improved.
Costs stemming from the punishing tariffs imposed by President Trump, along with the persistently low demand for its cars in China, led operating profit to plunge 70 percent in the third quarter, to 750 million euros ($873 million), from a year before.
But adjusted for €1.3 billion in one-time charges, largely because of restructuring costs linked to a voluntary redundancy program in Germany that started in April, Mercedes’ earnings slump was less severe, down 17 percent compared with the previous year.
Shares rose more than 3.8 percent in early Wednesday trading on the German stock exchange. Analysts said they viewed the numbers and the automaker’s plan to buy back €2 billion in shares as a reflection that the company was delivering on its promise to streamline its operations.
Analysts expected Mercedes to announce a buyback, “but the relatively high amount sends a signal of confidence,” Patrick Hummel, a UBS analyst wrote in a note.
China remains a weak spot for Mercedes, where sales fell 27 percent in the third quarter. Sluggish demand from Chinese customers and fierce competition from domestic rivals including BYD and Xiaomi, remain a challenge. Mercedes will introduce a semiautonomous vehicle in China later this fall.
“We are very aware of the challenges,” Ola Källenius, Mercedes’ chief executive, said on a call with analysts. He added that Mercedes would remain focused on improving efficiency and focus on the introduction of an array of new models. “We have a plan,” he said.
In the coming year, Mercedes plans to introduce more than 40 new models, which will include fully electric cars, hybrids and V-8 combustion engines, as it joins other German automakers in shifting away from an electric-only focus.
In July, Mercedes scaled back its earnings projection for the year, as it grappled with tariffs in the United States, one of its most important markets. All of Germany’s leading automakers, including BMW, Volkswagen and Porsche, have been hit by the tariffs, causing them to slash earnings forecasts and examine whether it makes sense to expand production in the United States.
Although the tariffs remain a challenge, the United States remains a growth market for Mercedes, Mr. Källenius said. He added that Mercedes was looking at expanding U.S. production beyond its plant in Alabama, where it builds S.U.V.s. He declined to say whether the company was considering raising prices in the United States to help compensate for the 15 percent import duty that took effect on Sept. 1.
A lot of Mercedes workers are expected to leave the company by the end of the year, Harald Wilhelm, the company’s chief financial officer, said on the call.
Melissa Eddy is a Times reporter based in Berlin who reports on Germany’s politics, businesses and economy.
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