DAIMLER, OWNER of Mercedes-Benz, warned investors that second-quarter results will stay deep in the red and said that a 2009 loss was possible, after the carmaker burned more than €1.4 billion in cash in the first three months.
Hours after agreeing to pay $600 million (€460 million) to ditch its last stake in stricken US automaker Chrysler, Daimler said yesterday that it swung to a €1.43 billion euro first-quarter operating loss as the markets for luxury cars and heavy trucks floundered.
Shares tumbled as Daimler offered little good news.
It said that its Mercedes car business would make money only in the second half and that group earnings would gradually improve, helped by €4 billion in planned savings – only some of them permanent.
“There was a bit of blind faith in the market recently that investors can affordably buy into two quality blue-chip companies going through a tough time and in a couple of months at the latest things would improve,” Metzler Bank analyst Juergen Pieper said.
He kept his “sell” rating for Daimler and its arch-rival BMW.
The firm’s chief financial officer, Bodo Uebber, told a conference call that the operating loss would narrow in the second quarter, excluding a $700 million (€536 million) one-off charge from selling 19.9 per cent in Chrysler, but he would not promise that the firm would turn a profit this year.