Daimler’s 2Q profit slips to nearly $2.2 billion
FRANKFURT, Germany —
Car maker Daimler AG reported Thursday its second-quarter profit slipped mainly on charges related to its stake in Chrysler LLC, and blamed its reduced full-year earnings outlook on a slowing global economy and higher production costs.
The company uttered profit in the April from one side June period fell 2 percent to 1.4 billion euros ($2.2 billion) compared to 1.8 billion euros in the same quarter a year ago. The set posted a 6 percent increase in sales to 25.4 billion euros ($40 billion) from 24 billion euros in the year-ago quarter.
Daimler said the lower configuration resulted from charges of 373 million euros ($587.1 million) put on its 18.9 percent stake in Chrysler LLC. Daimler sold 80.1 percent of Chrysler to Cerberus Capital Management LP in August 2007. Chrysler now is a privately held company and is no longer required to report its earnings.
The Stuttgart-based maker of Mercedes-Benz, Smart and Maybach cars said it continues to assume that its divisions will be practical to bring to a close their one sales targets for fiscal 2008, mete lowered its earnings watch-tower.
On the basis of the divisions’ projections, Daimler reported it expects to post earnings before interest and taxes from ongoing operations of more than 7 billion euros (almost $11 billion) in 2008, excluding costs related to Chrysler.
That outlook is appear gloomy than its previous estimate that pretax profit would be to a greater degree than the 7.7 billion euros it posted in 2007.
Daimler blamed the revision on the rising cost of raw materials, such as oil and steel, along with the stronger euro and a slowing global economy.
Despite the lowered prospect, CEO Dieter Zetsche said the company did show improvements in sales.
“Strong unit sales and further efficiency improvements in all of our divisions led to surpassingly admirable results in a beset with difficulty environment,” he said in a statement.
“We have prepared the group well conducive to this situation and fulfill all the requirements to rank among the best in our industry besides in besides difficult times,” he said.
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