Strong sales of Mercedes luxury cars in China and the US helped German automaker Daimler AG post a stronger than expected 57 percent increase in fourth quarter profits. The Stuttgart-based company made net profit of €1.78 billion ($2.36 billion) during the quarter, ahead of the average forecast compiled by FactSet of €1.30 billion. The company also recorded a record profit of €6.03 billion for the full year, up 29 percent from the year before, and increased its dividend. But it issued a cautious outlook Thursday, saying next year’s profits would only equal this year’s and that the debt crisis afflicting the 17-nation eurozone would mean a flat market in Western Europe. The company’s shares traded 3.8 percent higher at €46.32 in midday trading in Germany. In 2011 though, Daimler benefited from a strong sales performance of its Mercedes luxury brand, which saw sales jump in two key markets. They were up 42 percent in China and 44 percent in the United States. Operating earnings for the division, however, rose by a more modest 5 percent. The division’s strong sales performance helped overall revenue rise 10 percent to €29.06 billion from the fourth quarter of 2010, coming in above forecasts of €27.70 billion. Daimler’s Mercedes van business and its financial services division saw strong operating profit increases. On a downbeat note, the company said the eurozone debt crisis would weigh on the European auto market, which it expects to remain flat. It said it was looking to Asian emerging markets, Japan and North America for stronger demand. Overall, Daimler said earnings across all markets before interest and taxes from continuing businesses would only equal this year’s performance of €8.97 billion. European governments are struggling with a crisis over too much debt in some countries. Fears that a government default may hurt banks and choke off credit to the economy have weighed on consumer spending and business investment. Even so, Daimler said it expected the Mercedes division to beat its unit sales of 1.38 million this year worldwide. For the year as a whole, Daimler recorded a net profit of €6.03 billion, which represented an increase of 29 percent from €4.49 billion in 2010. Sales for 2012 came in at €106.54 billion, up 9 percent. Daimler’s workers will get a profit-sharing bonuses of €4,100 ($5,442) per eligible worker. And the company’s shareholders will get around 40 percent of net profit, paid out through a proposed dividend of €2.20 per share, up from €1.85 per share last year.