Daimler warns of profits snag from diesel, airbag recall

Business

FILE – In this file photo dated Wednesday, April 3, 2019, a worker wipes a logo of a car at the Mercedes Benz automobile assembly plant outside Moscow, Russia. German automaker Daimler expects pretax profits this year to be significantly lower than 2018, after setting aside more money to tackle the fallout from its diesel emissions problems and an airbag recall.(AP Photo/Pavel Golovkin, FILE)

BERLIN (AP) — German automaker Daimler expects pretax profits this year to be significantly lower than 2018, after setting aside more money to tackle the fallout from its diesel emissions problems and an airbag recall.

Friday’s announcement drove down Daimler shares, which were 1.1% lower at 46.52 euros ($52.50) on the Frankfurt exchange at midday.

It’s the second time Daimler has revised its profit forecast downward in recent weeks.

The company said its flagship Mercedes-Benz Cars unit is expected to see a return on sales of 3-5%, down from a previous estimate of 6-8%.

Daimler is setting aside a further 1.6 billion euros for “ongoing governmental and court proceedings and measures relating to Mercedes-Benz Diesel vehicles.”

It said it’s also increasing reserves related to the recall of Takata airbags by 1 billion euros.

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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