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DaimlerChrysler Profit Buoyed by Sales

It posts $910 million in net income, outdoing its U.S. rivals. New models help revenue jump 9%.

October 26, 2005|From Associated Press

DETROIT — DaimlerChrysler on Tuesday reported a $910-million profit for the third quarter, buoyed by sales of new products at its Mercedes and Chrysler divisions. The results were in sharp contrast to U.S. rivals General Motors Corp. and Ford Motor Co., which reported substantial losses last week.

DaimlerChrysler, based in Stuttgart, Germany, and Auburn Hills, Mich., said net income was down 21% in the quarter from $1.1 billion a year earlier. The automaker's earnings were boosted last year by tax-free income from the sale of a stake in Hyundai Motor Co.

DaimlerChrysler said its pretax operating profit for the quarter was $2.2 billion, up 38%. Revenue rose 9% to $46 billion as the number of vehicles sold rose 9% to 1.2 million worldwide.

DaimlerChrysler's earnings per share amounted to 89 cents, compared with $1.13 in the third quarter of 2004. Wall Street analysts surveyed by Thomson Financial had predicted 98 cents a share.

DaimlerChrysler said it expected full-year operating profit to be up slightly from last year's $7 billion, excluding restructuring costs for its Smart brand. It also expects vehicle sales to be up slightly.

With hot products such as the Chrysler 300 and Mercedes M-Class sedans, DaimlerChrysler is enjoying some success in a competitive environment that is pummeling other automakers. GM said last week that it lost $1.6 billion in the third quarter; Ford lost $284 million.

Chrysler Group reported an operating profit of $374 million, up 43% from $262 million. It was the division's ninth consecutive quarterly profit. Chrysler's revenue rose 12% to $15.5 billion for the quarter.

Chrysler's worldwide retail sales rose 13% to 736,000 vehicles. DaimlerChrysler said this summer's employee-discount incentive program in the United States and Canada gave sales a jolt, although earnings were partially offset by losses in "net pricing," which refers to selling prices minus any rebates or other discounts.

DaimlerChrysler's flagship Mercedes Car Group showed signs of a turnaround. The division has been troubled by quality problems, a strong euro and model changeovers and posted a scant operating profit of $14.4 million in the second quarter.

Separately, DaimlerChrysler said the U.S. Securities and Exchange Commission asked for information about the automaker's pension accounting, similar to requests to General Motors and Ford a year ago.

DaimlerChrysler's U.S. shares fell 2 cents to $49.71.

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