The German automotive company Daimler (ETR: DAI) has indicated a big decline in profits this year as the company has been struggling with legal issues and lower demand.
According to its statement, the company expects a Q2 loss of €1.6bn ($1.8bn), significantly different from €2.6bn ($2.9bn) profit in the year-ago period.
Daimler forecasted earnings will be around €11.1bn ($12.5bn), slightly lower than from the same period last year.
Regarding the second quarter shortcomings, Daimler cited higher costs linked to the recall of Takata airbags and legal issues related to the diesel emissions scandal.
Daimler has recently appointed a new chief executive, Ola Käellenius, replacing Dieter Zetsche who has retired.
“Looks like the new management team’s intention is to fully clean up and address key issues in the company. Whether this is the final warning for the year remains to be seen,” Arndt Ellinghorst, an analyst at Evercore ISI.