FRANKFURT— Daimler AG DAI.XE +3.97% Thursday said its third-quarter earnings rose sharply, bolstered by record sales and solid pricing of new Mercedes-Benz models. The German maker of premium cars and heavy trucks predicted a further rise in earnings for the fourth quarter, excluding the proceeds from asset sales this year and last.
Daimler's net profit rose 61% to 1.84 billion euros ($2.54 billion) from €1.14 billion a year earlier, also reflecting a steep drop in its tax bill to €175 million from €450 million.
Mercedes-Benz's earnings before interest and tax rose more than 20% to €1.2 billion on strong demand for the new A- and B-Class compact cars and the stalwart midsize E-Class sedan. The unit's operating profit margin improved to 7.3% from 6.4% in third quarter last year.
The cars are part of a product offensive planned by Daimler Chief Executive Dieter Zetsche to restore Mercedes-Benz as the top-selling premium car brand by 2020. BMW AG BMW.XE +1.48% and Volkswagen AG VOW3.XE +0.43% 's Audi NSU.XE -0.64% brand have surpassed Mercedes-Benz's sales and profits in recent years.
"This [quarter] shows the high investments we have made were money well spent," Mr. Zetsche said in a statement.
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