Daimler forecasts improved profitability after loss

Daimler AG, the world’s second- largest maker of luxury cars, forecast a “gradual improvement” in operating profit after the recession hurt its Mercedes-Benz brand’s sales and led to a third consecutive quarterly loss.

The second-quarter net loss was 1.02 billion euros ($1.4 billion) compared with a profit of 1.35 billion euros a year earlier, the Stuttgart, Germany-based company said today in a statement. The loss was narrower than the 1.14 billion-euro median estimate of seven analysts surveyed by Bloomberg News.

“It’s a very strong set of numbers,” driven by “stellar” improvement in working capital and better-than- expected cost cutting, said David Arnold, an automotive sales specialist at Credit Suisse in London.

Government-funded rebates in Germany, France and Italy have helped stem sales declines this year after industrywide deliveries in Europe dropped the most in 15 years in 2008. Mercedes-Benz’s share of the European auto market, its biggest, slipped to 4.1 percent in the first half of 2009 from 4.5 percent a year earlier as the incentives helped mass-market producers more than luxury manufacturers.

Daimler rose 1.37 euros, or 4.6 percent, to a 10-month high of 31.46 euros in Frankfurt trading, valuing the automaker at 33.4 billion euros.

Revenue Declines

The loss per share was 99 cents compared with earnings per share of 1.40 euros a year earlier. The loss before interest and taxes was 1 billion euros versus earnings of 2.05 billion euros a year earlier. Revenue fell 25 percent to 19.6 billion euros.