Friday's announcement drove down Daimler shares, which were 1.1% lower at 46.52 euros ($52.50) on the Frankfurt exchange at midday. It's the second time Daimler has revised its profit forecast downward in recent weeks.
The company said its flagship Mercedes-Benz Cars unit is expected to see a return on sales of 3-5%, down from a previous estimate of 6-8%. Daimler is setting aside a further 1.6 billion euros for "ongoing governmental and court proceedings and measures relating to Mercedes-Benz Diesel vehicles."
It said it's also increasing reserves related to the recall of Takata airbags by 1 billion euros.