Tuesday April 28, 05:31 PM
Car maker Daimler posts loss, issues warnings
By William Ickes
FRANKFURT (AFP) - German luxury car and truck maker Daimler (Xetra: 710000 - news) posted a stiff first-quarter loss Tuesday and warned sales would "decrease significantly" this year.
Daimler said it had suffered a net loss of 1.28 billion euros (1.66 billion dollars), against a profit of 1.3 billion euros in the same period a year earlier.
Sales fell 25 percent in the first three months of 2009 to 18.7 billion euros, while the group's operations showed a loss of 1.42 billion euros, a statement said.
"The Daimler Group's total revenue is likely to decrease significantly in the full-year 2009" from the previous year's level of 95.9 billion euros, it added.
And "earnings in the second quarter are expected to be significantly negative once again," Daimler said.
Shares in the automotive group plunged by 5.40 percent to 25.90 euros in midday trades on the Frankfurt stock exchange, while the DAX index (Xetra: news) of German blue-chips was off by 2.57 percent overall.
Like other auto groups, the maker of Mercedes Benz cars and trucks has been slammed by the global collapse of automobile markets.
In Japan, Honda Motor Company (Paris: JP3854600008 - news) said Tuesday it fell into a 186.1-billion-yen (1.9-billion-dollar) loss in the fiscal fourth quarter due to weak sales and a stronger yen.
Mitsubishi (MBC.IL - news) reported Monday a loss of 54.9 billion yen for the year to March, and said the market remained tough but that it was starting to see some signs of an improvement.
In Sweden, truckmaker Scania (Stockholm: SCVB.ST - news) posted Monday a 93-percent-drop in first-quarter profit to 179 million kronor (16.6 million euros, 21.8 million dollars) as orders for its vehicles hit a wall.
Daimler said it had "initiated measures designed to adjust costs and avoid expenditure across all divisions" and at its headquarters in Stuttgart, southern Germany.
The plan should provide cost savings of four billion euros a year, said Daimler, which employed 263,819 people at the end of March.
Daimler boss Dieter Zetsche recently refused to rule out job cuts at the company, which suffered from "sharp drops in unit sales at Mercedes-Benz Cars, Daimler Trucks and Mercedes-Benz Vans in the first quarter of 2009."
The automotive division nonetheless expected to post positive earnings in the second half of the year, the statement said.
Daimler said it had earned 449 million euros from the sale of property at Berlin's Postdamer Platz, and 102 million from the transfer of shares in the European aeronautic group EADS (Paris: NL0000235190 - news) .
But the group also booked charges of 491 million euros in connection with its holding in the distressed US car maker Chrysler, a former Daimler division.
Another 700 million dollars in charges was expected before Chrysler was finally separated from Daimler's books.
On Monday, Daimler said it would give up its 19.9 percent stake in Chrysler and forgive outstanding loans from the struggling firm, which must draw up a viable plan this week to continue receiving US government support.
Looking ahead, Daimler said it would launch its "smart" city car in China and Brazil this year, but that in general, "lower volumes are anticipated above all in the markets of the United States, Western Europe and Japan."
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