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Daimler sees sharp drop in Q2

DAIMLER expects another sharp loss in the second quarter after posting first-quarter results that fell far short of expectations and it burnt through more of its cash.

Only hours after exiting its disastrous investment in United States car maker Chrysler, the company said yesterday that earnings before interest and tax swung to a loss of 1.43 billion euros (US$1.86 billion), making good on its profit warning in February.

Industrial free cash flow fell by 2.2 billion euros to a negative 1.1 billion euros during the quarter, but it nearly compensated for this deterioration thanks to an infusion of fresh equity by new major shareholder Aabar which helped lift net industrial liquidity to 3.74 billion euros.

Results were worse than the near 950-million-euro loss forecast on average in a Reuters poll of 20 analysts. All major divisions posted losses amid a sharp slump in demand and government scrapping schemes that mainly helped rivals making smaller cars.

The firm warned that "earnings in the second quarter are expected to be significantly negative once again, however."


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