DaimlerChrysler reports lower profits for 2003

FRANKFURT, Germany -- Automaker DaimlerChrysler said its profit tumbled in 2003 as its U.S. division Chrysler struggled and the company made several large one-time deductions from earnings.

DaimlerChrysler said Wednesday that it earned 448 million euros ($564 million) last year compared with 4.7 billion euros in 2002.

Large one-time charges cut into profits, including 2.0 billion euros ($2.5 billion) for the fallen value of its 33 percent stake in the European aerospace company EADS and 469 million euros ($569 million) for restructuring costs at Chrysler.

That was partly offset by a one-time gain of 1 billion euros ($1.2 billion) for the sale of its MTU Aero Engines subsidiary.

Earnings in 2002 had been inflated by one-time items, such as 2.5 billion euros from selling the company's information systems division.

Sales for the year fell to 136.4 billion euros ($171.9 billion) from 147.4 billion euros in 2002, a decline the company attributed to the weaker U.S. dollar. Otherwise, revenues would have increased 3 percent, the company said.

The company has struggled with depressed earnings at Chrysler, which faces tough price competition from General Motors and Ford in the North American auto market. The use of incentives such as cheap financing and rebates have propped up sales but eaten into profit margins.

DaimlerChrysler didn't break out fourth-quarter figures or results for its divisions, which include Chrysler, Mercedes-Benz and commercial vehicles -- leaving suspense over whether Chrysler made its target of a small operating profit for 2003 until the company reports more details on its earnings Feb. 19 at its annual news conference in Stuttgart.

Chrysler had a loss of 649 million euros ($816 million) through the first nine months of the year, hard hit by a disastrous 948 million euro loss in the second quarter.

DaimlerChrysler's operating earnings -- which exclude financial items such as interest and taxes -- were 5.7 billion euros ($7.1 billion), down from 6.8 billion euros in 2002. That was close to the average expectation of 5.8 billion euros ($7.2 billion) from 10 analysts surveyed by Dow Jones Newswires.

Subtracting one-time expenses, the company said it had earned 5.1 billion euros from ongoing operations, meeting its target of 5 billion euros ($6.2 billion). That excluded Chrysler restructuring expenses and the gain from the sale of the MTU Aero Engines subsidiary.

DaimlerChrysler shares, which had declined about 2 percent during Wednesday's trading in Frankfurt, ended the day down 0.4 percent at 37.15 euros ($46.73). On the New York Stock Exchange, the company's U.S. shares fell 15 cents to close at $46.24.

Analyst Georg Stuerzer at HVB Group in Munich said the company's operating earnings were in line with his expectations.

"The one thing that was a little surprising was the size of the Chrysler charge," Stuerzer said. Previously the company had indicated it would deduct around 300 million euros for restructuring at the division, he said.

Headquartered in Stuttgart, Germany, and Auburn Hills, Mich., DaimlerChrysler is the result of the 1998 merger of Daimler-Benz and Chrysler Corp.

Copyright C 2004 Deseret News Publishing Co.
Provided by ProQuest Information and Learning Company. All rights Reserved.