The German-US auto giant DaimlerChrysler posted weaker second quarter earnings on Wednesday but raised its full-year profit forecast thanks to cash from its sale of shares in the aerospace group EADS.
DaimlerChrysler also announced plans to spend up to 7.5 billion euros (10.2 billion dollars) on a share buyback operation over the next 12 months, calling it a “logical” step given strong liquidity within its industrial sector.
The company is now banking on full-year earnings before interest and tax of about 8.5 billion euros, up from five billion euros last year.
DaimlerChrysler said it expected to earn 1.4 billion euros from the sale of a 7.5-percent stake in EADS, the parent company of aircraft maker Airbus, which saw the US-German group's holdings reduced to 15 percent.
The carmaker's profit forecast was also boosted by a lower-than-expected expected charge of 2.5 billion euros related to the sale of its loss-making US unit, Chrysler, to the private equity firm Cerberus.
It had earlier put this figure at between three and four billion euros.
For 2007, Daimler-Chrysler said it expected turnover to remain stable compared with last year, when it came to about 99 billion euros, and for unit sales to hold steady as well, at some 2.1 million vehicles.
The group, which from October will be known only as Daimler, said that in the future it would focus on its leading brand, Mercedes-Benz, along with its market-leading lorrry division.
Despite pumping billions into Chrysler, which it bought in 1998, the group never managed to make a success of its foray into the US market. The losses it continues to suffer there undermined its second quarter results.
The group posted a net profit of 1.84 billion euros, a decrease of about 14 percent from the first three months of 2006, while turnover fell by 3.0 percent to 23.8 billion euros.
