Stuttgart, Germany  - German carmaker Daimler AG cut its 2008 earnings forecast Thursday in the face of a slowing world economy, a surging euro and increasing raw material costs.

The announcement by the manufacturer of luxury Mercedes Benz cars that it had revised down its earnings before interest and tax (EBIT) to more than 7 billion euros (11 billion dollars) sent the group's shares sharply down.

The Stuttgart-based carmaker had previously said that it expected EBIT from the group's ongoing operations to top the 7.7 billion euros it posted in 2007.

Daimler's shares dropped by about 8.0 per cent to 39.30 euros following the announcement.

The company's move to lower its forecast came despite the group's second-quarter EBIT falling less than expected from 2.13 billion euros to 2.05 billion euros.

Announcing its latest results, Daimler, which is also the manufacturer of the super luxury Maybach and the compact Smart, said second-quarter net profit fell to 1.4 billion euros compared to 1.8 billion euros in the same period last year.

Group sales rose 6 per cent to 25.4 billion euros. (dpa)