BERLIN (dpa-AFX) - German automaker Daimler AG on Friday lowered its earnings outlook for fiscal year 2019 after its second-quarter earnings came in significantly below market expectations.
The maker of Mercedes-Benz cars said its earnings for the second quarter were impacted by increased costs and provisions related to the crackdown on diesel emissions and the recall related to Takata airbags.
Daimler's preliminary second-quarter earnings before interest and taxes or EBIT were minus 1.6 billion euros, compared to profit of 2.6 billion euros in the year-ago quarter.
EBIT for the quarter was impacted by an increase in provision by about 1.0 billion euros for an extended recall in Europe and the rest of the world in connection with Takata airbags.
In addition, ongoing governmental and court proceedings and measures relating to Mercedes-Benz Diesel vehicles in various regions increased expected expenses by around 1.6 billion euros.
Further, the company noted that a portfolio review will impact earnings of the Mercedes-Benz Vans division by about 0.5 billion euros.
EBIT for the Mercedes-Benz Cars division in the second quarter was minus 0.7 billion euros, compared to profit of 1.9 billion euros in the year-ago period. The Mercedes-Benz Vans division's EBIT for the quarter was minus 2.0 billion euros, compared to 0.2 billion euros in the prior-year quarter.
Looking ahead, Daimler lowered its fiscal 2019 EBIT outlook for the second time, citing the above factors, lower product ramp ups and weaker-than-expected growth in automotive markets.
The company now projects fiscal 2019 Group EBIT to be 'significantly below' the prior year. In June, Daimler said it expected full-year EBIT to be 'in the magnitude of' the previous year.
In Germany, shares of Daimler are trading at 46.07 euros, down 1.24 percent.
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