FRANKFURT -- DaimlerChrysler's third-quarter operating profit rose 7 percent, just below analyst expectations, as weaker earnings at carmaker Mercedes took the shine off gains at the Chrysler group..
DaimlerChrysler reiterated on Thursday a forecast for "significant improvement" in 2004 operating profit excluding one-time items, even though its flagship Mercedes Car Group now expected "substantially lower" operating earnings.
It had said in July only that Mercedes would not match 2003 earnings as originally planned.
"Mercedes is brutal. Everything else is clearly better than expected," said HVB analyst Georg Stuerzer, suggesting new Mercedes chief Eckhard Cordes was clearing the decks by packing as much bad news as possible into the third-quarter figures.
Landesbank Baden-Wuerttemberg stock market strategist Frank Schallenberger said he was surprised the stock had not rallied.
"Net profit was clearly better than expected, and the Chrysler outlook was confirmed so I can't find the bad news," he said.
DaimlerChrysler posted overall operating profit of $1.66 billion. Revenue rose 2 percent to $44.45 billion, while net profit swelled to $1.21 billion from a year-earlier loss amid a big impairment charge.
Twenty-one analysts polled by Reuters had, on average, forecast operating profit of $1.75 billion, sales of $45.15 billion and net profit of $888.1 million.
The carmaker generated 2003 third-quarter operating profits of $1.59 billion on sales of $43.47 billion. Full-year 2003 operating profit excluding one-offs was $6.49 billion.
Mercedes' operating profit fell to $387.3 million from $1.01 billion a year earlier. It blamed a change in model mix as it rejuvenates its product line, high launch and start-up costs for a product offensive, currency headwinds and stepped-up spending to fix quality problems that have tarnished its image.
Chrysler's operating profit advanced to $276.5 million despite $132.5 million in restructuring charges. It forecast "considerable positive earnings" this year amid a wave of successful new models that have let it limit margin-eroding sales incentives.
The group's booming commercial vehicles business saw operating profit fall to $202.5 million after absorbing $516 million in costs for the impact of recalls and quality problems at its Mitsubishi Fuso truck and bus unit in Japan.
Struggling Japanese partner Mitsubishi Motors Corp., whose losses hit DaimlerChrysler's second-quarter net profit by almost $637.1 million, was no longer a drag on earnings due to a change in accounting for Daimler's stake.