GERMAN auto maker Daimler AG reported a third-quarter profit of 213 million euros (US$273 million) yesterday, reversing a year-ago loss of 1.5 billion euros. But the firm abandoned its 2008 earnings forecast and reported a fall in North American sales. The company's shares fell.

The Stuttgart-based maker of Mercedes-Benz, Smart and Maybach cars said despite the turnaround, sales fell 7 percent to 23.8 billion euros in the third quarter because of an abrupt fall in North American figures. That compared to sales of 25.7 billion euros in the third quarter of 2007.

Shares in Daimler were down nearly 6 percent to 22.70 euros in Frankfurt trading.

The company's earnings before interest and taxes slid to 648 million euros in the quarter, compared with 1.89 billion euros a year earlier.

Daimler blamed the drop on lower earnings at its °?Mercedes-Benz Cars division, along with special items that reduced the results by 765 million euros.

Daimler said it could no longer achieve its earnings forecast for the rest of the year, blaming the global financial crisis.

The company said the 'massive turmoil on financial markets and the resulting effects on economic developments in the industrialized countries' meant 'previous earnings forecasts for 2008 can no longer be achieved.'

Past predictions

When Daimler reported first-half earnings in July it said its revenues for 2008 should be slightly higher than in 2007. But it lowered its full-year earnings forecast at the time by US$1 billion to US$11 billion, citing the rising cost of raw materials, the strong euro and a slowing global economy.

The global uncertainty also led to a decision by Daimler to temporarily halt its share buyback program, short of its goal of buying back 10 percent of its shares.

Despite the turbulence, Chief Executive Dieter Zetsche waxed optimistic about Daimler's position.