Daimler Shares Fall After Latest Warning
July 12 2019 - 4:18AM
Dow Jones News
By Nathan Allen
Shares in Daimler AG (DAI.XE) dropped on Friday after the German
premium auto maker issued its second profit warning in less than
three weeks and reported a steep loss for the second quarter.
Daimler was hit by higher-than-expected legal costs for diesel
investigations and had to increase provisions for a global recall
relating to defective airbags.
The maker of Mercedes-Benz cars posted a second-quarter loss
before interest and taxes of 1.6 billion euros ($1.80 billion)
compared with a profit of EUR2.6 billion a year earlier.
The company now expects 2019 group EBIT to be "significantly
below" the prior year level, compared with a previous forecast for
earnings to be roughly in line with 2018's result.
At 0735 GMT Daimler had recovered from early losses to trade
1.1% lower at EUR46.14, having dropped more than 4.5% after the
opening bell.
Daimler's warning is the latest in a string of guidance cuts
from export-dependent German industrial groups, which have been
roiled by this year's escalation in trade tensions.
Auto makers and their suppliers have been hit particularly hard,
as President Trump's threats to slap tariffs on the sector
increased pressure on an industry already grappling with
increasingly stringent emissions regulations and changing consumer
trends.
Chemical maker BASF SE (BAS.XE) slashed its profit forecast
earlier this week, citing sluggish automotive demand among other
factors, while BMW AG (BMW.XE) cut its outlook in March due to
economic pressure.
Write to Nathan Allen at nathan.allen@dowjones.com
(END) Dow Jones Newswires
July 12, 2019 04:03 ET (08:03 GMT)
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