Daimler slashes 2019 profit forecast after second-quarter loss

Fri, 2019-07-12 07:19

FRANKFURT AM MAIN: German auto giant Daimler, maker of
Mercedes-Benz, on Friday slashed its 2019 profit forecast for the
second time in a few weeks, after booking a $1.8 billion (€1.6
billion) operating loss in the second quarter.
By comparison, between April and June last year, the
Stuttgart-based group chalked up operating profit of €2.6
But unforeseen events, including a mass recall over faulty airbags
and government probes and legal cases related to the
“Dieselgate” emissions cheating scandal, prompted the company
to set aside more cash in provisions and increase estimated costs
for the year, Daimler said in a statement.
That meant the carmaker now expects to book an annual operating
profit “significantly below” the €11.1 billion recorded in
2018, it said.
Daimler already downgraded its outlook on June 23, penciling in
flat earnings instead of a slight increase as it tackled the
fallout from the “Dieselgate” scandal that had forced it to set
aside hundreds of millions of euros in provisions.
The previous day, Germany’s KBA road transport authority ordered
the company to recall 60,000 vehicles it suspected were fitted with
software to reduce harmful emissions under lab testing
Last year, the office had already ordered the recall of 700,000
Daimler-made vehicles worldwide over illegal software.
As well as the one-off events, Daimler said it was making slower
progress bringing new models to market, while demand worldwide is
less robust than expected.
And changes to the product line-up in its Vans division — one of
those affected by recalls — will generate additional costs of
€500 million, the company said.

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Source: FS – All-News-Economy
Daimler slashes 2019 profit forecast after second-quarter loss