DAIMLER AG, the world's second- largest maker of luxury vehicles, said yesterday that its first-quarter profit dropped 32 percent, more than estimated, after a stake in former US unit Chrysler dragged down earnings and truck sales fell.
Net income declined to 1.33 billion euros (US$2.07 billion), or 1.29 euros per share, from 1.97 billion euros, or 1.89 euros, a year earlier, Stuttgart, Germany-based Daimler said in a statement yesterday. According to Bloomberg News, analysts had predicted a profit of 1.46 billion euros.
Revenue barely rose to 23.5 billion euros. Daimler's 20-percent stake in Chrysler, the third-largest United States auto maker, wiped 491 million euros from earnings as a slowing economy hurt sales. Revenue at the truck business, the world's largest, fell 13 percent to 6.33 billion euros as US deliveries plummeted 47 percent. Mercedes-Benz Cars boosted both profit and sales.
Chief Executive Officer Dieter Zetsche said demand from Russia and China means full-year operating profit should still be "well above" 2007's level, excluding the impact of Chrysler. Bayerische Motoren Werke AG, the No. 1 maker of luxury cars, said yesterday that its first-quarter profit fell 17 percent on the US slowdown while predicting a gain in full-year pretax profit.
Daimler, whose year-ago earnings were swollen by a gain from the sale of a stake in European Aeronautic, Defence & Space Co, was trading little changed in Frankfurt yesterday. The stock has declined 24 percent this year, reducing the company's market value to 51.6 billion euros.
Zetsche sold 80.1 percent of Chrysler to New York-based buyout firm Cerberus Capital Management LP in August.