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Business

Daimler says good-bye to earlier profit forecasts

German top of the line auto maker Daimler has revised its 2012 and 2013 profit targets on the back of lower gains in the third quarter of this year. The company is particularly worried about its European business.

German carmaker Daimler confirmed disappointing net profits in its third-quarter report on Thursday, which was inadvertently published a day too early. The Stuttgart-based firm announced an 11 percent drop in gains between July and September to 1.21 billion euros ($1.6 billion).

Daimler said it now expected to earn an operating profit of around eight billion euros this year, down from a previous forecast of 8.8 billion euros and added that earlier profit targets for 2013 would most likely not be met either.

"Because of the challenges linked to economic developments we will not reach last year's EBIT (earnings before interest and taxes)," Daimler Chief Dieter Zetsche said in a statement. He noted that not all figures were disappointing in the third quarter, citing a rise in sales by 8.0 percent which however didn't translate into more profit.

Jobs are safe

Daimler's flagship Mercedes segment proved a particular headache for the company in the third quarter. It only earned 975 million euros, down from 1.1 billion euros in the same period last year. Rival Audi posted almost twice as much in earnings.

Daimler stated it was in the process of streamlining its sales operations in China as the world's biggest car market. The company said it was worried by slumping business in Europe where demand for new cars would this year reach its lowest level in two decades.

Despite plans to save some two billion euros by 2014, management said it did not envisage any layoffs.

hg/kms (Reuters, AFP)