Daimler's 2Q profit slips to nearly $2.2 billion

The company said profit in the April through June period fell 25 percent to 1.4 billion euros ($2.2 billion) compared to 1.8 billion euros in the same quarter a year ago. The company posted a 6 percent increase in sales to 25.4 billion euros ($40 billion) from 24 billion euros in the year-ago quarter.

Daimler said the lower figure resulted in part from costs of 373 million euros ($587.1 million), including restructuring expenses and cheaper values for Chrysler cars, related to its 19.9 percent stake in Chrysler Holding LLC.

Daimler sold 80.1 percent of Chrysler to Cerberus Capital Management LP in August 2007. Chrysler now is a privately held company and is no longer required to report its earnings.

Looking ahead, the Stuttgart-based maker of Mercedes-Benz, Smart and Maybach cars said it continues to assume that its divisions will be able to achieve their unit sales targets for full year 2008, but lowered its earnings outlook.

On the basis of the divisions' projections, Daimler said it expected to post earnings before interest and taxes from ongoing operations of more than 7 billion euros (nearly $11 billion) in 2008, excluding costs related to Chrysler.

That outlook is lower than its previous estimate that pretax profit would be "significantly" more than the 7.7 billion euros it posted in 2007.

Daimler blamed the revision on the rising cost of raw materials, such as oil and steel, along with the stronger euro and a slowing global economy.

The company said it expects total revenue for the year to be slightly higher than the 99.4 billion euros it achieved in 2007.

Despite the lowered outlook, CEO Dieter Zetsche said the company did show improvements in sales.