Daimler May Raise Its Forecast
DaimlerChrysler may raise its profit forecast for 2002 when it posts second-quarter earnings next month because of better-than-expected performance at its U.S.-based Chrysler unit.
DaimlerChrysler Chief Executive Juergen Schrempp said Monday that Chrysler will be profitable this year and that the company may raise its forecast as a result, spokesman Thomas Froehlich said. Schrempp made the comments in an interview with Dow Jones Newswires, saying he expects “very, very good” second-quarter results at Chrysler.
“They have good reason to raise their forecast--Chrysler is well ahead of plan, and the expectations at the beginning of the year were extremely low,” said Juergen Pieper, an analyst at Bankhaus Metzler with a “buy” rating on DaimlerChrysler shares.
Chrysler is in the middle of a three-year plan to eliminate 26,000 jobs; close plants in the U.S., Mexico and Canada; reduce production and cut parts costs by 15%.
The No. 3 U.S. auto maker had a $1.9-billion loss last year and aimed to at least break even this year.
Chrysler’s U.S. sales in May rose 4.4% compared with the same month a year ago.
Schrempp’s comments come two weeks after Chrysler Chief Operating Officer Wolfgang Bernhard said he expects the unit’s results “to be better than break-even this year” because better marketing and incentives have helped sales. Chrysler lost $125 million in last year’s second quarter.
Stuttgart, Germany-based DaimlerChrysler “remains cautious about the second half of the year given the economic and political uncertainties,” Schrempp said.
The company has said it expects full-year profit of “significantly more” than $2.54 billion, excluding certain expenses.
The auto maker will release second-quarter results July 18.
Chrysler’s cost-cutting and U.S. sales “will improve our operating profits quite substantially when you compare it to last year,” Chrysler’s Bernhard said earlier.
On Monday, DaimlerChrysler’s U.S. shares fell 6 cents to close at $43.55 on the New York Stock Exchange.
