By Patrick Costello

Shares of Daimler AG (DAI.XE) fell Monday after the German car maker lowered its 2019 earnings outlook, saying that it expects legal costs related to the diesel-emissions scandal to increase.

Daimler said it expects to take a "high three-digit million" euro hit during the second quarter due to an increase in provisions for "governmental proceedings" and other measures relating to the diesel scandal.

The company also said earnings before interest and taxes for 2019 are now forecast to be in line with the previous year, compared with its earlier forecast of slight growth. Return on sales of Mercedes-Benz vans is now expected to be between minus 2% and minus 4%, it said.

At 0843 GMT, Daimler traded down 4.7% at EUR47.28. The share is up 2.8% on year.

Analysts at Jefferies said that while the company's guidance cut wasn't surprising in itself, the magnitude of the warning was.

"We believe the market has lost confidence in guidance already after a weak Q1 and expected new management to reset benchmarks later in the year," Jefferies said.

Still, the cut appears "bigger in magnitude," the bank added.

The size of the guidance cut also raises doubts about Daimler's management, analysts at Evercore ISI said.

"The endless array of so called 'one-time' effects raises questions regarding process, management information systems and ultimately accountability of management," Evercore said.

"At some stage when one-time items become the norm, credibility suffers," it added.

Write to Patrick Costello at patrick.costello@dowjones.com

(END) Dow Jones Newswires

June 24, 2019 05:06 ET (09:06 GMT)