Chrysler missed its target to break even
SINDELFINGEN, Germany, Feb 19 (Reuters) - DaimlerChrysler <DCXGn.DE>
said on Thursday that its struggling U.S. unit Chrysler missed its target to break even last year but forecast a slight increase in group operating profit in 2004.
"DaimlerChrysler is striving to achieve a slight increase in operating profit in 2004 compared to the results in 2003," the company said in a statement.
The world's fifth-biggest car maker said its Chrysler division, also known for its Jeep and Dodge vehicles, made an operating loss of 506 million euros ($644.9 million) in 2003 after the group spent 469 million on continuing restructuring.
Stripping out restructuring costs, Chrysler still lost 40 million euros. The group said in a statement it expected earnings at Chrysler to increase from 2004.
Profit at Mercedes, DaimlerChrysler's (nyse: DCX - news - people) main source of income in recent years, rose three percent to 3.126 billion euros, while its recovering trucks business posted operating profit of 855 million against a loss of 300 million in 2002.
Earlier this month, the Stuttgart-based group posted 2003 profit excluding one-off items of 5.1 billion euros, beating its five-billion-euro goal, but down from 5.8 billion in 2002.
Shares in the group, whose Chrysler unit is key to its stock performance, have been trading just below 15-month peaks struck in late January amid hopes for an improving U.S. market. They were up 0.35 percent at 37.10 euros in early trade on Thursday.
Chrysler, facing a U.S. price war and fierce competition from Japanese rivals, has been the main setback in a six-year global strategy which has seen Germany's Daimler-Benz merge with Chrysler and purchase stakes in Korea's Hyundai <005380.KS> and Japan's Mitsubishi Motors <7211.T>.
Its problems do not end in the United States though. Mercedes is facing stiff competition in the luxury segment from Munich-based BMW <BMWG.DE>, and DaimlerChrysler may yet have to pump more money into loss-making Mitsubishi.
DaimlerChrysler said on Wednesday it had extended Chief Executive Juergen Schrempp's contract to 2008, giving him four more years to salvage his dream of creating a global car maker.
Copyright 2004, Reuters News Service
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