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DaimlerChrysler Beats Forecasts

Automaker sees increase in operating profit despite tough market conditions.

October 24, 2002|John Porretto | Associated Press

DETROIT -- Boosted by strong results at its Chrysler unit, DaimlerChrysler on Wednesday posted better-than-expected operating profit for the third quarter, but the automaker joined its major U.S. competitors with serious pension shortfalls.

DaimlerChrysler, based in Stuttgart, Germany, said its profit dropped 22% to $764 million in the third quarter, compared with the same period last year. But its operating earnings beat analysts' expectations despite tough market conditions.

Net income, adjusted for one-time effects, rose to $871 million, or 88 cents a share, from 28 cents the year before. Revenue rose 1% to $35.9 billion.

A turnaround program at Chrysler helped the U.S. division contribute $321 million in operating profit -- in contrast to a loss of $264 million in the same quarter a year earlier.

"The significant improvement in earnings was achieved despite the challenging environment," the company said.

Chrysler's U.S. competitors, General Motors Corp. and Ford Motor Co., have forced it to compete on costly sales incentives, such as no-interest financing.

Ford and GM both reported third-quarter losses last week.

Chrysler's third-quarter sales rose 8% to 681,600 vehicles, which Chief Financial Officer Manfred Gentz attributed in part to strong demand for the Jeep Liberty, Dodge Ram and PT Cruiser.

DaimlerChrysler shares fell 81 cents to $37.05 on the New York Stock Exchange.

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