April 8 (Bloomberg) -- Daimler AG said it anticipates a “gradual improvement” in profit this year after recording what’s likely to be its second consecutive loss in the first quarter because of the deepening global recession.

Car markets won’t recover until the second half, and full- year revenue will be “significantly lower” than in 2008, the world’s second-largest maker of luxury vehicles said at its annual shareholders meeting today in Berlin.

Chief Executive Officer Dieter Zetsche forecast a “significant” loss for Stuttgart, Germany-based Daimler in the first three months of this year following a 1.53 billion-euro ($2.03 billion) deficit in the fourth quarter. Since then, Daimler has announced plans to cut more than 3 billion euros in spending and has sold shares to Abu Dhabi, making the emirate its biggest investor, to raise 1.95 billion euros in cash.

The economy in Europe, where Daimler generates about half of its revenue, contracted the most in 13 years in the fourth quarter after consumers reined in spending and companies scaled back production. The region’s economy may shrink 4.1 percent this year, the Organization of Economic Cooperation and Development has forecast.

Daimler, which has cut the number of unsold cars to year- ago levels, plans to reduce inventories further by curtailing production, Zetsche said, without providing figures.

Inventory Goal ‘Positive’

Scaling back inventories is a “positive” move to conserve cash, Juergen Meyer, a fund manager at SEB Asset Management in Frankfurt who owns Daimler shares, said in an interview.

“If you have to name four or five companies that will survive the crisis, then Daimler certainly belongs to that list,” Meyer said.

Daimler rose 1.78 euros, or 7.9 percent, to 24.39 euros in Frankfurt trading to the highest price since Feb. 11. That pared the stock’s decline this year to 8.7 percent, valuing the manufacturer at 25.9 billion euros. Analysts at Goldman Sachs Group Inc. raised their recommendation on Daimler shares to “buy” from “neutral” today.

The company, which owns the Mercedes-Benz vehicle brand, delivered 23 percent fewer cars in the first quarter. Daimler has reduced hours for 68,000 workers since the beginning of 2009 while scaling back auto and truck manufacturing. Truck deliveries fell 39 percent in the first quarter, while orders plunged 68 percent.

Quarterly Loss

The fourth-quarter net loss stemmed partly from 2.01 billion euros in costs related to the sale of Daimler’s former Chrysler unit to Cerberus Capital Management LP in 2007. Daimler, which still owns 19.9 percent of Auburn Hills, Michigan-based Chrysler, said today that it transferred 22 sales outlets outside North America back to the U.S. company in March.

Zetsche told the more than 6,000 shareholders attending the meeting that Daimler was preparing for “all eventualities” for Chrysler, which is seeking additional loans from the U.S. government. Talks with Cerberus on disposing its remaining Chrysler stake were complicated by the U.S. private-equity firm’s “unacceptable” demands, he said.

At the end of 2008, Daimler wrote down the value of its stake in Chrysler and outstanding loans to zero. The truck division, the world’s biggest maker of heavy-duty commercial vehicles, outlined an annual savings goal of least 1 billion euros on March 20 that included pay cuts, reduced marketing and plant closures. Zetsche said today that the unit plans to reorganize operations in Asia.

Labor Talks

Daimler entered talks with unions on April 1 on ways to save 2 billion euros this year. The automaker wants to delay a wage increase in Germany, reduce bonuses and withhold a profit- sharing payment to conserve cash while widening work-hours cuts to 73,000 non-production employees.

“We will do whatever needs to be done,” Zetsche said, adding that jobs cuts won’t be excluded if the crisis deepens. “Radical cost-cutting is indispensable at times of crisis.”

A group of protesters wearing masks depicting Zetsche stood before a large banner that said “Against Wage Cuts.” The dozen demonstrators were shaking tin cups and begging shareholders to contribute their 60 cent-a-share dividend.

“The employees shouldn’t have to bear the costs of the crisis,” said Thomas Adler, a member of the works council at the company’s Untertuerkheim plant in Stuttgart.

To contact the reporter on this story: Chris Reiter in Berlin at creiter2@bloomberg.net.

Last Updated: April 8, 2009 12:16 EDT