Daimler posts $1.51 billion loss in 2nd quarter

[July 29, 2009]  BERLIN (AP) -- German auto and truck maker Daimler AG said Wednesday it lost euro1.06 billion ($1.51 billion) in the second quarter as sinking sales from the recession and charges related to its stake in Chrysler hurt earnings. But the result was better than analyst predictions and company shares rose.

Daimler, one of the world's leading luxury carmakers, with brands including Mercedes-Benz, Maybach and Smart, said the loss in the April-June period compared with a profit of nearly euro1.3 billion a year earlier.

Analysts surveyed by Thomson Reuters had expected a net loss of euro1.5 billion.

Despite the third quarterly loss in a row, the company predicted a "gradual improvement" in its operating profit in the coming months.

The news helped push Daimler shares up nearly 5.4 percent to euro31.68 in Frankfurt trading.

Sales fell 25 percent to euro19.6 billion in the quarter compared with euro26 billion last year, below the euro20 billion that analysts had forecast, a stark reminder of the bleak landscape that car makers worldwide face amid the economic crisis.

Stuttgart-based Daimler said sales across all of its units, including luxury cars, vans, trucks and buses slid 31 percent in second quarter compared to last year with just 391,500 sold worldwide.

Looking ahead to the end of 2009, the automaker said that total sales were likely to "decrease significantly" from last year when it sold 2.1 million vehicles.

Other factors that weighed on the figure included its relinquishing a 19.9 percent equity stake in Chrysler that took effect June 3.

Daimler will make three payments of euro200 million each through 2011, according to the agreements, which resulted in euro387 million in expenses during the second quarter.

However, Daimler said the effects were partially offset by a transfer of charges in stock in aerospace concern EADS NV which saw it gain euro35 million.

Daimler said as a result of the ongoing worldwide market weakness, its trucks division's second-quarter revenue fell to euro4.2 billion from euro7.4 billion a year ago. The truck business pretax loss was euro508 million compared with a profit of euro608 million last year, with factors including the restructuring of the North American truck business.

The global truck market is regarded as very cyclical, and analysts had predicted declines at the division. Daimler is the world's biggest truckmaker by sales with brands including Mercedes, Freightliner and Fuso.

The truck division's unit sales decreased by almost 60 percent to 54,100 units for the quarter, but Daimler said its market share increased in nearly all its major markets.

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[Associated Press; By MATT MOORE and GEORGE FREY]

AP Business Reporter Frey reported from Frankfurt.

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