UPDATE 1-Daimler warns on 2008 profit on bleak Q3 results

* Daimler warns on 2008 profit, expects EBIT above 6 bln eur

* Daimler Q3 EBIT 648 mln eur vs poll estimate 1.38 bln eur * Shares fall as much as 8.8 percent

FRANKFURT, Oct 23 (Reuters) - Daimler (DAIGn.DE) lowered its full-year revenue and profit forecast after third-quarter operating profit plunged by two-thirds, the maker of Mercedes-Benz cars and Freightliner trucks said on Thursday.

Earnings before interest and taxes (EBIT) came in at 648 million euros ($833 million), compared to the average estimate of 1.38 billion euros from a Reuters poll of 16 analysts [ID:nLH254510].

Daimler said it now expects full-year EBIT to exceed 6 billion euros excluding one-off items and the impact of its remaining stake in U.S. carmaker Chrysler. It saw a slight decline in revenue.

"We are in a situation that is very challenging," Chief Executive Dieter Zetsche said in a statement.

"I am confident Daimler will emerge from this situation stronger."

Speculation had been building over a possible second profit warning even though Daimler had scaled back its 2008 forecast when publishing second-quarter figures at the end of July.

Originally, it expected EBIT to well exceed the underlying 7.7 billion euros earned last year, but analysts estimated it would still come in several hundred million euros short of its revised target of more than 7 billion excluding Chrysler-related effects.

An expected recession and ongoing slump in car sales in its core markets spell trouble for Daimler's plans to achieve a 10 percent EBIT margin at its Mercedes-Benz Cars division and 8 percent at Daimler Trucks by 2010.

It cut its forecast again to see an EBIT margin of around 5 percent at Mercedes-Benz Cars this year due to roughly 450 million euros in charges for valuations of used cars coming off leases.

Having racked up charges of 1.05 billion euros in the first nine months from its holding in Chrysler, Daimler continues to negotiate the sale of its remaining 19.9 percent stake to majority owner Cerberus [CBS.UL].

Stephen Feinberg's buyout firm is itself eyeing a possible sale of the troubled U.S. carmaker to cash-strapped local rival General Motors (GM.N) in a deal that could be brokered before U.S. elections in early November.

Daimler is the first German automotive group to report, with Volkswagen (VOWG.DE) reporting on Oct. 30 along with truckmaker MAN (MANG.DE) and car parts giant Continental (CONG.DE). BMW (BMWG.DE) follows on Nov. 4.

Auto analysts have preferred cheaper Daimler stock to arch-rival BMW, in part because the latter is more exposed to risks from crumbling used car prices due to its aggressive leasing offers that assumed overly ambitious residual values when those vehicles come off lease.

Daimler trades at 4.7 times next year's estimated earnings, a discount to the 6.8 multiple of BMW.

(Reporting by Christiaan Hetzner, editing by Michael Shields)