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Daimler Q1 profit slumps despite Mercedes gains

AFP · 29 Apr 2008, 15:48

Published: 29 Apr 2008 15:48 GMT+02:00

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Overall group net profit slumped to €1.3 billion ($2.0 billion), while operating profit shed 40 percent to €1.97 billion, owing in large part to an unfavourable comparison with the first quarter of 2007 when the sale of shares in the aerospace group EADS had boosted Daimler's earnings.

This year, the sale of property on the Potsdamer Platz in Berlin failed to make up the difference and Daimler also had to book €491 million in charges stemming from the sale of its former US division Chrysler.

Daimler sales, meanwhile, were steady at €23.5 billion, a statement said.

The group confirmed its full-year outlook of a significant increase in core earnings and higher sales even though slowing global economic growth was "making life harder for the automotive industry."

A breakdown of the results showed the Mercedes-Benz division boosted operating profit by 45 percent to €1.15 billion.

The truck division posted a fall of 24 percent to €403 million however amid a "tense economic situation in the United States," the introduction of new US emission standards that had boosted sales prior to the period and a supply bottleneck in Europe.

Operating profit at Daimler's bus division, which is being restructured, tumbled 80 percent to €371 million.

That division also booked the charges linked to Chrysler's sale and was where the sale of EADS shares had been accounted for a year earlier.

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Finally, Daimler's financial services division posted a 21-percent drop in operating profit to €168 million as a result of reorganization charges and "increased risk costs."

Daimler shares slipped 0.47 percent to €50.35 on the Frankfurt stock exchange where the Dax index of leading shares was down 0.47 percent overall.

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