Daimler??™s Mercedes Unit Reports Strong 2nd-Quarter Profit Growth

(Adds comments from conference call, shares, market reaction)

By Michael Shields

FRANKFURT, July 25 (Reuters) - DaimlerChrysler AG's (DCXGn.DE: Quote , Profile , Research ) premium Mercedes Car Group has set its sights on a 10 percent operating margin by 2010 after tough streamlining helped its second-quarter profit advance by nearly three quarters.

Cost-cutting and a rich model mix that boosted revenue per unit sold saw Mercedes earnings before interest and tax (EBIT) gain 74 percent to 1.2 billion euros ($1.66 billion), the world's fifth-biggest carmaker said, beating expectations.

Better-than-expected EBIT at the group's market-leading trucks business despite a sharp market downturn in North America and Japan also impressed the market on Wednesday.

"The numbers are solid. They are above expectations and the margins have also improved," said Stephan Thomas, a fund manager at Frankfurt Trust. "They have done a good job. I am pleased."

The preliminary figures showed revenue flat at 12.56 billion euros despite a dip in unit sales, with the Mercedes EBIT margin nearing 9.6 percent in the quarter, easily beating its minimum 7 percent target for 2007.

Analysts polled by Reuters had expected a Mercedes EBIT of 1.01 billion euros in the quarter.

Source: [url=http://www.nytimes.com/2007/07/26/business/26daimler.html?ref=business]New York Times[/url]