Daimler's third-quarter operating profit declined, as the cost of making diesel engine cars run cleaner and other special items outweighed record sales of Mercedes-Benz luxury models.
Earnings before interest and tax (EBIT) at the German group plunged 14% to €3.46 billion in the three months from July to September, Daimler said.
This was in line with the €3.43 billion consensus forecast in a Reuters poll of banks and brokerages.
Daimler last quarter spent €223m to update over three million current and older Mercedes diesel models in Europe to curb pollution and help avert driving bans.
A recall of more than one million passenger cars and sport-utility vehicles worldwide to address potential unintended air bag deployments announced this week will add another €230m in costs, it said.
The cars and trucks manufacturer stuck with its guidance for a significant increase in group EBIT this year.
It said it now expected EBIT at its trucks division to also significantly exceed year-ago levels, having previously guided for flat EBIT.
Earnings at Daimler Trucks, the group's second-largest unit by revenue, jumped by a third to €614m, benefiting from strong momentum in North America where heavy-truck orders rose to the highest in over two years in September.
Daimler said it expects EBIT at its financial services division to significantly beat year-earlier levels, having previously guided for earnings to rise only slightly.
Third-quarter deliveries of Mercedes luxury cars rose 7.9% to a record 573,026 models, powered by strong demand for sport-utility vehicles such as the GLA and GLC models and the E-Class.
That beats the 1.2% gain to 499,467 cars at rival BMW, which Mercedes last year eclipsed as the world's biggest premium car maker by sales, and the 3.6% rise to 471,850 cars at Volkswagen's Audi brand.
