German carmaker Daimler has reported a surprise increase in first-quarter operating profit.
It said that was partly thanks to stronger than expected earnings at its financial services business that offers loans and leases to car buyers.
However Daimler’s shares fell as investors were unimpressed with the fact that the amount of cash that the company has in reserve shrank at a rate of nearly 21 million euros a day during the quarter.
Earnings before interest and tax (EBIT) rose five percent to 2.13 billion euros.
The picture is mixed for car manufacturers, with strong growth in the United States offset by sluggish demand in Europe, where austerity measures are dragging many economies into recession and depressing consumer confidence.
Growth in some Asian markets is slowing from previous high levels, but overall demand for premium cars like the Mercedes-Benz GLK sports utility vehicle are holding up better than the price-sensitive mass market models.
Daimler blamed a seasonal increase in stocks of unsold vehicles for its having burned four times as much cash at its industrial operations than a year earlier. That reduced its cash pile by 1.9 billion euros to 10.1 billion at the end of March.