Daimler Cuts Outlook, Sets Aggressive Cost Targets

Daimler AG lowered its forecast for 2012 profit because of deteriorating market conditions worldwide.

The company intends to garner "benefits" of €2 billion by the end of 2014 from sales growth and improved pricing and unspecified reductions to spending on materials, production, fixed costs, R&D and capital expenditures.

Daimler also scrapped its targets for operating returns on sales for 2013. The company previously aimed for car and truck operating margins of 10% and 8%, respectively.

Daimler now expects to earn €8 billion before interest and taxes this year, down from its previous goal of matching last year's €9 billion income. The carmaker predicts lower EBIT at all its units, including €4.4 billion for Mercedes-Benz Cars and €1.7 billion at its truck division.

The forecasts accompanied Daimler's report of third-quarter results, which was inadvertently released on Wednesday, one day ahead of schedule.

The company netted €1.2 billion in the July-September period compared with €1.4 billion a year earlier. EBIT slid 2% to €1.9 billion, partly because of increased spending to develop and launch new cars and commercial trucks, according to Daimler.

Revenue grew 8% to €28.6 billion, thanks largely to favorable exchange rates. Group sales edged up 1% to 528,600 vehicles.

Demand for the company's cars and trucks rose 2% to a record 345,400 units and 3% to 119,100 units, respectively. Volume for buses and vans dropped 12% to 55,700 units because of deteriorating sales in western Europe.