DaimlerChrysler Posts Net Loss
BERLIN (AP) _ DaimlerChrysler AG announced a net loss and a big cut in its dividend for 2001, and warned Wednesday that it will fall short of its targets this year as it battles to turn around its ailing Chrysler unit.
The world’s No. 5 automaker said the cost of reorganizing Chrysler, as well as its Freightliner truck unit, pushed it to a loss of 662 million euros ($589 million) last year compared with a net profit of 7.89 billion euros in 2000. Revenue fell to 153 billion euros ($136 billion) from 162 billion euros a year ago.
DaimlerChrysler, headquartered in Stuttgart, Germany and Auburn Hills, Michigan, has been battered from the fallout of the Sept. 11 terror attacks and by brutal price-cutting on the crucial U.S. auto market _ factors that outweighed good returns at its Mercedes-Benz luxury car unit.
The company also has incurred billions in charges to shake up Chrysler and Freightliner, announcing plans to shutter plants and lay off thousands of workers. The warning about this year’s earnings was vague and stirred new doubts about the success of the program.
``The general rationale everywhere is weaker markets, but they didn’t say which market or which division,″ said Krista Kepler, an analyst at Merck Finck and Co. in Munich. ``There’s no indication whether this is stuff that’s been addressed or stuff that is going to have to be addressed.″
DaimlerChrysler said it would propose a dividend of 1.00 euro (86 cents) per share, down from 2.35 euros in 2000, to reflect its earnings performance _ more bad news that helped push the company’s stock lower.
Shares in DaimlerChrysler closed down 4.3 percent at 42.81 euros ($37.15) on the Frankfurt exchange. In trading Wednesday on the New York Stock Exchange, DaimlerChrysler shares fell 97 cents, to close at $37.01.
Releasing other key figures ahead of its Feb. 20 annual press conference, the company said it had an operating profit of 1.3 billion euros ($1.1 billion) adjusted to exclude restructuring charges as well as taxes and interest.
That was at the low end of its target range of 1.2 billion euros to 1.7 billion euros ($1 billion to $1.5 billion). Analysts consider that figure a better indicator of the strength of the company’s business.
Including the restructuring costs, it posted an operating loss of 1.3 billion euros.
At the same time, DaimlerChrysler said its 2002 goal for an adjusted operating profit of 5.5 billion euros to 6.5 billion euros ($4.7 billion to $5.6 billion) would not be met until ``slightly later.″
The original projections, made a year ago, ``were based on assumptions that more favorable economic conditions would prevail. The reality is that the fundamentals have become more uncertain and the task more challenging,″ the company said in a statement.
Still, adjusted 2002 operating profits would more than double from 2001′s figure of 1.3 billion euros ($1.1 billion), it forecast, but didn’t say how much more.
``DaimlerChrysler is confident that it will take profits to much higher levels in the future,″ the statement read.