By Nathan Allen 
 

Shares in Daimler AG (DAI.XE) dropped on Friday after the German premium auto maker issued its second profit warning in less than three weeks and reported a steep loss for the second quarter.

Daimler was hit by higher-than-expected legal costs for diesel investigations and had to increase provisions for a global recall relating to defective airbags.

The maker of Mercedes-Benz cars posted a second-quarter loss before interest and taxes of 1.6 billion euros ($1.80 billion) compared with a profit of EUR2.6 billion a year earlier.

The company now expects 2019 group EBIT to be "significantly below" the prior year level, compared with a previous forecast for earnings to be roughly in line with 2018's result.

At 0735 GMT Daimler had recovered from early losses to trade 1.1% lower at EUR46.14, having dropped more than 4.5% after the opening bell.

Daimler's warning is the latest in a string of guidance cuts from export-dependent German industrial groups, which have been roiled by this year's escalation in trade tensions.

Auto makers and their suppliers have been hit particularly hard, as President Trump's threats to slap tariffs on the sector increased pressure on an industry already grappling with increasingly stringent emissions regulations and changing consumer trends.

Chemical maker BASF SE (BAS.XE) slashed its profit forecast earlier this week, citing sluggish automotive demand among other factors, while BMW AG (BMW.XE) cut its outlook in March due to economic pressure.

 

Write to Nathan Allen at nathan.allen@dowjones.com

 

(END) Dow Jones Newswires

July 12, 2019 04:03 ET (08:03 GMT)

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