Daimler profit sinks on diesel; outlook for year lowered

October 19, 2018 - 11:59 am

FRANKFURT, Germany (AP) — German automaker Daimler lowered its profit outlook for the second time this year on Friday and reported reduced third-quarter profits due to regulatory and diesel emissions issues.

The company said its group operating profit would be "significantly below" last year's, instead of "slightly lower" as forseen in July.

A similar downgrade applied to expectations for the Mercedes-Benz luxury car division, a pillar of the company's earnings.

Daimler reported third-quarter earnings before interest and taxes of 2.48 billion euros ($2.85 billion), down from 3.41 billion in the same quarter in 2017. The Mercedes division saw operating earnings fall to 1.37 billion euros from 2.10 billion euros in the same period.

The company had already lowered its earnings outlook once, on June 20. That was largely due to increased import tariffs for vehicles the company makes in the United States and sells in China.

The company cited "ongoing governmental proceedings" and "measures in various regions with regard to Mercedes-Benz diesel vehicles." It also said that its vans business recorded lower unit sales due to delays in vehicle deliveries.

The company didn't specify the ongoing government proceedings. German regulators in June ordered a recall of around 700,000 diesel vehicles in Europe to update engine software and reduce what officials regarded as excessive emissions. It also faces investigations into suspected manipulation of diesel emissions in the United States and Germany, according to its second-quarter earnings report. The company says it is cooperating with the probes.

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