BERLIN—Daimler AG DAI.XE +2.89% said a worsening economic climate in Europe has put its profit outlook for the year in doubt, the latest setback for the maker of Mercedes-Benz cars as it struggles to revive its lagging sales and profitability.
Daimler—long the world's top-selling luxury car maker until falling behind both BMW AG BMW.XE +2.55% and Volkswagen AG's VOW3.XE +0.92% Audi NSU.XE 0.00% in recent years—originally hoped it would narrow the gap with its rivals this year with the start of a wide-ranging model offensive and multibillion-euro cost-cutting program. Instead, its note of caution suggested it may fall even further behind them.
The German luxury car and truck maker already tempered expectations earlier this year by warning that a grim European market and the company's recent stumbles in China would lead to flat earnings in 2013. But Wednesday, Chief Executive Dieter Zetsche said an even sharper-than-anticipated drop in European demand would force it to "reassess" whether its assumptions for 2013 were still valid and that it would update its profit outlook when it reports first-quarter earnings April 24.
Analysts said it was all but certain now that Daimler would cut its 2013 profit targets. The move to reassess "is half a profit warning," analyst Juergen Pieper of Bankhaus Metzler said.
"We don't anticipate much tailwind in the coming months, either," he said at the company's annual shareholders meeting in Berlin. "For the European truck and car markets, in particular, there are no signs of a trend reversal."
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