FRANKFURT, Germany (AP) — Automaker Daimler said Sunday that profits for the second quarter will be hit by troubles with diesel vehicles from its Mercedes-Benz brand and downgraded its earnings forecast for the full year.
The company said in a news release that it would be hit by “a high three-digit million” euro increase in charges related to ongoing government proceedings and measures related to diesel vehicles.
It said full-year operating earnings would be “in the magnitude” of last year’s 11.1 billion euros ($12.6 billion) instead of seeing slight growth.
The company’s Mercedes-Benz Vans division would see a loss amounting to a negative return on sales of 2% to 4% for the years. The division lost 98 million euros in the first quarter.
Daimler was ordered Friday by Germany’s vehicle authority to recall 60,000 SUVs with technology the authority said impermissibly reduced emission controls. The company said in its first-quarter earnings release it faces a probe of emissions matters by the U.S. Justice Department; German prosecutors in Stuttgart searched company offices as part of a probe in 2017 and are also investigating. Daimler also faces a consumer class-action lawsuit in the US along with supplier Bosch alleging a conspiracy to deceive U.S. regulators.