Recession Drags Daimler to Second-Quarter Net Loss

Last Updated Jul 29, 2009 8:12 AM EDT

Daimler earnings fell to a net loss of about $1.5 billion in the second quarter, versus net income of close to $2 billion in the year-ago quarter.

The company's spinmeisters stressed that Daimler narrowed its loss versus the first quarter of 2009, and that the company expects passenger-car sales to improve in the second half. That's because of greater availability and new variants coming to market for a new-generation E-Class and the all-new GLK crossover.

However, Daimler Chairman Dieter Zetsche conceded the results show Daimler has "a lot more work to do," with regard to cost-cutting and efficiency measures.

For the full year, Daimler expects sales to fall in each of its industrial divisions: passenger cars are expected to be down 15 to 20 percent; commercial trucks, down 40 to 50 percent; vans down 35 to 40 percent.

In the slumping U.S. market, the company said passenger-car unit sales fell 26 percent to 50,714 in the first quarter, or 30 percent to 94,641 in the first half. Including passenger cars and commercial vehicles, worldwide unit sales fell 31 percent to 391,500 in the second quarter.

Daimler officially gave up its remaining 19.9 percent stake in Chrysler effective June 3, the company said had already written off the value of its stake earlier. As part of a settlement from the breakup of the former DaimlerChrysler, Daimler agreed to pay $600 million into Chrysler's pension plans.

Chart: Daimler