Loss Forecast Drives Down DaimlerChrysler

The company expects its U.S. operation to lose more than $1 billion in the second quarter.
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Shares of



were lower a day after the company said its U.S. unit would post a loss of more than $1 billion in the second quarter amid tremendous efforts to stay competitive in the auto industry.

The Chrysler Group will also probably fall short of the company's prior full-year profit targets.

Additionally, DaimlerChrysler reportedly plans to go ahead with an offering of $2.5 billion of five-year notes, even though it said Tuesday it would withdraw the offer. The issue had already been priced.

Shares of DaimlerChrysler were lately down 98 cents, or 3.1%, to $30.67. Several brokerage firms came out Wednesday with negative comments on the company.

The company's forecast came on the heels of its May sales report. DaimlerChrysler, along with

General Motors

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, posted

tepid sales last month as the incentives the carmakers have been using to bring buyers onto lots seem to have lost some of their effectiveness.

Chrysler's car sales were 5% below last year and truck sales fell 3%.

DaimlerChrysler wasn't the only straggler among the automakers, as shares of GM and Ford were also trading lower in afternoon

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