Slump at Mercedes hits DaimlerChrysler earnings

10th February 2005, Comments 0 comments

10 February 2005 , STUTTGART - In a reversal of the picture of previous years, transatlantic car gaint DaimlerChrysler said on Thursday its performance is now buoyed by the Chrysler group while earnings at the luxury carmaker Mercedes fell sharply in 2004. In reporting its provisional results for last year, the US-German company said it boosted its net income EUR 2.5 billion, compared with just EUR 400 million the year before, but warned that profit growth this year would be slower. Operating profits, at E

10 February 2005 

STUTTGART - In a reversal of the picture of previous years, transatlantic car gaint DaimlerChrysler said on Thursday its performance is now buoyed by the Chrysler group while earnings at the luxury carmaker Mercedes fell sharply in 2004.

In reporting its provisional results for last year, the US-German company said it boosted its net income EUR 2.5 billion, compared with just EUR 400 million the year before, but warned that profit growth this year would be slower.

Operating profits, at EUR 5.8 billion, were up from the 2003 figure of EUR 5.1 billion. Revenues, at EUR 142.1 billion, were 4 percent higher, while vehicle sales increased 8 percent to EUR 4.7 million, DaimlerChrysler said.

The Stuttgart-based concern's fourth-quarter figures showed a sharp drop in operating profit and net income amid plunging figures from the Mercedes group.

The company said net income in the fourth quarter, at EUR 526 million, was down over 60 percent from the EUR 1.4 billion figure in the last quarter of 2003.

Fourth-quarter operating profit, at EUR 785 million, was also down about two-thirds from almost EUR 2.4 billion in the final quarter of 2003, DaimlerChrysler's figures showed.

In a reversal of the picture in previous years when Chrysler was the problem area and Mercedes the star performer, DaimlerChrysler reported that in 2004, the Mercedes Car Group's operating profit plunged to EUR 1.7 billion, from EUR 3.1 billion the year before.

In the fourth quarter, the Mercedes group operating profit had plunged to just EUR 20 million, compared with EUR 784 million a year earlier.

The Chrysler Group, by comparison, showed a EUR 1.4 billion operating profit in 2004 in a turnaround from losses of EUR 506 million the year before. In the fourth quarter, Chrysler's operating profit came to EUR 386 million, compared with EUR 143 million in the final quarter of 2003.

DaimlerChrysler, praising the turnaround and improvement of quality at Chrysler, said that part of the profit performance problems at Mercedes could be attributed to a changing mix of models, adverse currency factors, and high costs of launching new products and boosting quality.

Besides the downturn at Mercedes, DaimlerChrysler said its earnings in 2004 were also hurt by charges from Mitsubishi Fuso Truck and Bus Corporation (MFTBC) and from the highway truck toll consortium Toll Collect.

DaimlerChrysler said it its bracing for a "weaker first and second quarter" in 2005, so that the full-year operating profit will be only slightly higher than those last year.

The company said it expected "significant earnings improvements" in 2006, when the Mercedes Car Group's product offensive takes effect and Chrysler adds new models to the markets.

But it also cautioned that it faced challenges from the weak US dollar and high raw-materials prices.

DPA

Subject: German news

 

0 Comments To This Article