By Sarah Sloat 
 

Shares in Daimler AG gained Friday after third-quarter results beat expectations and the German car maker sounded an upbeat note for the rest of 2020 that suggests a positive outlook for the sector.

"Daimler has seen a faster than expected market recovery and a particularly strong September performance," it said. The maker of Mercedes-Benz cars said it expects positive momentum to continue in the fourth quarter.

At 0734 GMT, Daimler shares were 4.4% higher at EUR48.90.

Overnight, Daimler reported third-quarter earnings before interest and taxes of 3.07 billion euros ($3.6 billion), compared with a EUR2.49 billion consensus forecast provided by the company. Earnings before interest and taxes for the Mercedes-Benz Cars & Vans division was EUR2.12 billion, against a EUR1.78 billion forecast.

Analysts at Citi said the strong results should boost Daimler shares and lift the sector, with the company benefiting from strong market trends.

"We expect a positive share-price reaction--although investors had been positioning for a prerelease from Daimler, we expect the scale of the positive surprise to be supportive to shares for Daimler and the entire sector," Citi said.

Volkswagen AG shares traded 1.9% higher at 0734 GMT, while BMW AG was up 1.4%. French car makers Renault SA and Peugeot SA traded 1.8% and 2.1% higher, respectively. Fiat Chrysler Automobiles NV traded 1.5% higher.

Earlier Friday, auto manufacturer association ACEA reported that the European Union car market registered its first increase of the year in September, though the picture isn't entirely positive.

"Despite last month's positive results, the impact of Covid‐19 still weighs heavily on the cumulative performance of the EU car market," ACEA said.

Daimler said its expectations for the fourth quarter assume there are no further lockdowns related to the coronavirus. The company will provide updated guidance and full quarterly results on Oct. 23.

Write to Sarah Sloat at sarah.sloat@wsj.com

(END) Dow Jones Newswires

October 16, 2020 04:10 ET (08:10 GMT)