FRANKFURT -- DaimlerChrysler on Wednesday beat its own operating profit targets for last year and held its dividend steady, sparking a degree of confidence in the German company's prospects.
The world's fifth biggest carmaker, battling to revive its U.S. Chrysler unit even after a three-year overhaul, said 2003 operating profit excluding one-off items came to 5.1 billion euros ($6.4 billion), exceeding its target of about five billion euros but down from 5.8 billion euros in 2002.
Investors said it was difficult to read too much into the results as a divisional breakdown comes on February 19.
"The number we should focus on, the clean operating profit, was higher than the market's expectations, and we think that was driven by either Chrysler or the trucks unit," said Adam Collins, an auto analyst at Commerzbank in London.
He noted that the positive surprise had been concentrated in the fourth quarter, which inspired confidence going forward.
Traders also said the decision to leave the dividend unchanged at 1.50 euros per share was a sign of confidence.
The company is striving to make a success of its global strategy, which has in the last six years involved the merger of Germany's Daimler-Benz with the U.S.'s Chrysler and the purchase of stakes in Korea's Hyundai and Japan's Mitsubishi Motors.
Hopes of an improving U.S. market have pushed its shares higher this year, and they are trading close to a 15-month high, raising speculation that the company's biggest shareholder, Deutsche Bank, may soon sell its 12 percent stake.
Unadjusted operating profit fell to 5.7 billion euros from 6.8 billion euros in 2002 and was lower than market forecasts, thanks partly to higher-than-expected costs of 469 million euros for restructuring Chrysler.
The sale of the MTU Aero engines business also boosted operating profit by about one billion euros.
But Chrysler remains the key to the company's share performance, and so far few analysts have been willing to bet the unit met its target of a small operating profit for 2003.
After a three-year turnaround plan, including 26,000 job cuts and sharp cost reductions, Chrysler is still being hurt by a U.S. price war and fierce competition from Japanese rivals.
Chrysler is pinning its recovery hopes on new products and is launching nine models this year and 25 in the next three years, but some analysts think sales incentives will continue to erode the bottom line.
The trucks and financial services businesses are expected to have boosted profits, while Mercedes, the group's profit motor over the last few years, has forecast flat earnings.
Troubled Mitsubishi Motors also threatens to be a cash drain, with reports this week that DaimlerChrysler, whose brands include Mercedes, Jeep and Freightliner, plans to invest in a rescue package.