Daimler net profit falls 32 percent on model changeover

FRANKFURT, Germany (AP) — German car, truck and bus maker Daimler AG saw net profit fall 32 percent in the first quarter as costs to launch its new E-Class mid-size weighed on the bottom line, the company said Friday. Net profit fell to 1.40 billion euros ($1.60 billion) from 2.05 billion euros...

FRANKFURT, Germany (AP) — German car, truck and bus maker Daimler AG saw net profit fall 32 percent in the first quarter as costs to launch its new E-Class mid-size weighed on the bottom line, the company said Friday.

Net profit fell to 1.40 billion euros ($1.60 billion) from 2.05 billion euros in the year-earlier quarter.

Revenue rose 2 percent to 35 billion euros on vehicle sales of 683,885, a 7 percent increase.

The net profit figure fell short of analyst expectations of 1.70 billion euros as compiled by financial information provider FactSet.

But company officials said the dip in earnings did not indicate a lasting slowdown in their business. The company said in a statement that net profit had been hurt by expenses associated with introducing the new E-Class, a luxury sedan stuffed with new driver-assistance technology the company hopes will make it a highly profitable contributor to earnings.

Profits were also held back by increased investments in new products and technology, which in theory should pay off in higher profits down the road.

Chief financial officer Bodo Uebber said the company expected a stronger second half of the year as E-Class sales kick in.

CEO Dieter Zetsche said in a statement Friday that the sales growth shows "we are following the right strategy and have the right products in the market."

The earnings were overshadowed by the announcement Thursday that Daimler is investigating what it says are "possible indications of irregularities" in its emissions certification process, at the request of the U.S. government.

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