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UPDATE 1-DaimlerChrysler sees profit for Chrysler unit

(Rewrites with confirmation, adds share price)

NEW YORK/FRANKFURT, June 25 (Reuters) - Automaker DaimlerChrysler AG said on Tuesday business in the second quarter of the year had been strong and the group expected its U.S. unit Chrysler to make a profit in 2002.

A company spokesman confirmed remarks made by Chief Executive Juergen Schrempp in an interview with the Wall Street Journal, which chimed with comments made in recent weeks by group executives about a pick-up in the U.S. car market.

"We will have a very, very good second quarter at Chrysler and, of course, that means at the group as well," Schrempp told the newspaper in an interview published on Tuesday. "Chrysler will be positive this year."

DaimlerChrysler shares gained 2.2 percent to 45.6 euros by 0724 GMT, broadly in line with the blue-chip DAX index and the Dow Jones European autos sector .

Last year, Chrysler had an adjusted operating loss of 2.18 billion euros ($2.13 billion), paying the price for ageing products and high costs.

The unit, which is emerging from a costly restructuring programme, posted an adjusted operating profit of 127 million euros in the first quarter of 2002, compared to a loss of 1.4 billion a year ago.

Schrempp said on June 1 that Chrysler could post a profit this year, rather than breaking even as previously forecast, if the U.S. market recovery continued.

Chrysler unit sales rose 4.4 percent in May, compared with the same month a year ago, after a three percent rise in April.

The turnaround will be a huge relief for Schrempp, whose moves to form a global auto titan have come under shareholder criticism as Chrysler's financial woes proved a heavier burden than expected on earnings and the company's shares.

Schrempp would not comment on the outlook for the parent company, saying only that he would probably say more about expectations for 2002 after the release of first-half results on July 18.