DaimlerChrysler AG should achieve higher earnings in 2003 if all goes according to plan, building on solid numbers reported in 2002.
But it’s a big if – relying on political and economic stability in North America and Europe; labor peace; no blips in currency exchange or interest rates; strong sales of new products; and continued success in the turnaround plans forGroup, Motors Corp. and Freightliner Corp.; just to name a few.
DC finishes 2002 with an adjusted operating profit of $6.1 billion, or $7.2 billion including one-time effects – a huge improvement over 2001’s operating loss of $1.4 billion.
A positive one-time effect of $1.1 billion was recorded, as the $2.8 billion gain from the sale of a 49.9% interest in T-Systems and 40% stake in TEMIC exceeded one-time expenses related to turnaround plans atGroup ($700 million), the Commercial Vehicles division ($500 million) and the Services division ($400 million).
Group net income, excluding special charges, rose from $800 million to $3.5 billion. Earnings per share jumped from $0.77 to $3.46.
Revenues took a fall: decreasing by 2% to $156.8 billion. And employment dipped to 365,571 from 372,470 prior-year, in keeping with planned layoffs at Chrysler Group and reduced capacity at the Commercial Vehicles division.
In terms of spending, DC invested $7.5 billion in plants, equipment, property and research and development in 2002.
Chrysler Group exceeds expectations and surpasses the breakeven target for 2002, as outlined in the turnaround plan, and announces the 86,000 eligible employees will receive their first profit-sharing checks since 2000. Employees will receive a lump sump averaging $460 later this year.
The division achieves an operating profit, excluding one-time effects, of $1.38 billion. That compares with an operating loss of $2.29 billion in 2001, which also was in keeping with turnaround targets. Including one-time effects, Chrysler reports an operating profit of $64 million, much improved from the 2001 operating loss of $5.54 billion. Worldwide, Chrysler sales of 2.82 million vehicles exceeded the 2.76 million sold in 2001.
But revenues of $63.1 billion represent a 5% falloff from like-2001’s $66.6 billion. The auto maker ascribes it to currency exchange, saying revenue remains at the same level when measured in U.S. dollars.
Conversely, the Mercedes Car Group (Mercedes-Benz, Smart, Maybach) reports a 5% increase in revenues, to $52.6 billion, with operating profit of $3.17 billion also slightly higher than year-ago.
Commercial vehicles saw revenues of $29.8 billion, down slightly from the previous year’s $30 billion.
Looking ahead, DC Chairman Juergen Schrempp expects 2003 group revenue to climb only 0.9%, but earnings should improve.
Revenues are projected to remain flat at Chrysler, but the division is expected to reach its operating profit target of $2 billion. The Mercedes group likely will see flat unit sales, revenue and earnings, while Mercedes itself should increase sales slightly. Commercial Vehicles operations should be unchanged and Services results may fall.
For 2004 and beyond, DC forecasts growth – helped by new products and improving markets.
In other related news:
- DC says it has statements from 11 former Chrysler board members, including former Chairman Robert
, supporting the claim that the multimillion lawsuit by former stakeholder Kirk Kerkorian is baseless. The U.S. District Court in Wilmington, DE, is to decide after March 17 whether the case should proceed.
- Schrempp confirms DC has no interest in acquiring struggling Auto SpA, but says a potential alliance was studied years ago.
|Note: Dollar sales and net income stated in millions; unit sales in thousands. E/S is earnings per share. Dollar amounts based at €1=$1.05. Unit sales are worldwide wholesale deliveries. Net Income excludes adjustments.|