DaimlerChrysler AG first quarter earnings exceeded Wall Street expectations, despite a dip in operating profit.
Unit sales increased 9.4% to 1.32 million vehicles, generating $39.2 billion in revenue. That is an increase of 21.8%, partly due to a weaker euro than like-1999.
Net income rose 7.5% to $1.62 billion and earnings per share increased 7.3% to $1.62 from $1.51 — more than Wall Street estimates of $1.58.
Operating profit dropped 3% based on the euro (DC's official currency), but actually increased 1% in U.S. dollars because the euro has dropped in value from a year ago.
The German-U.S. automaker blamed the competitive U.S. market for a 7% drop in earnings in euros or 3.5% in U.S. dollars in thedivision. Strong minivan and Jeep sales were not enough to overcome the cost of incentives estimated at $2,000 per vehicle, up $500 from like-1999.
|Note: Dollar sales and net income stated in millions; unit sales in thousands. |
E/S is earnings per share.Dollar amounts based at 0.96 euro = $1 for 1st. Q. 2000 and 0.92 euro = $1 for 1st Q. 1999.
*Unit sales are worldwide wholesale deliveries.
Overall, thegroup reported a 24% increase in revenue to E19 billion but the currency exchange brings it to a 29% increase or $18.2 billion on a 10% increase in the number of vehicles sold. Mercedes-Benz and Smart recorded E9.9 billion ($9.5 billion) in revenue.
The Smart car operation is forecast to generate a profit by 2004 after a dismal performance since the launch of the 2-seater in 1998.
The commercial vehicles division was up, as was Dasa, the aerospace unit that will merge with the French Aerospatiale Matra to form the European Aeronautic, Defense & Space Co. It is expected to go on the stock market this summer.
Looking ahead, Chrysler anticipates record sales with the new PT Cruiser and launches of the new '01 minivan and mid-size cars.
Chairman Juergen Schrempp says the fiscal year will benefit from the deal to take a 34% controlling share inMotors Corp. by fall. DC's supervisory board has given management approval to complete talks.
At Wednesday's annual meeting in Berlin, shareholders approved a buy-back program of 10% of outstanding capital stock as well as a plan to offer options on 96 million shares to 6,500 top executives by 2005 to strengthen the company's ability to attract top managers.