DaimlerChrysler may cut its dividend when it posts fourth quarter earnings on Wednesday 5th February. It would be the first time that the company has cut its dividend.
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Speculation of a dividend cut has been further heightened by a Reuters poll of analysts in which most predicted a cut in the dividend per share to an average of 1.60 euros from 2.35 euros.
DC is expected to post a sharp drop in fourth quarter earnings and in 2001 earnings, reflecting a difficult year overshadowed by the problems of its ailing Chrysler unit.
Speaking to financial analysts in conjunction with the North American International Auto Show, DaimlerChrysler CFO Manfred Gentz said the change in economic conditions would cause the company to post an operating profit for 2001 of about 1.2 billion euros ($1.07 billion). In 2000, the company posted an operating profit of 5.2 billion euros.
In February of last year, the group set an operating loss target range of $US2 billion to $2.5 billion (2.2 billion to 2.6 billion euros) for 2001 as part of a restructuring plan aimed at returning to break-even this year and posting a significant rise in profits in 2003.
For the first three quarters of 2001, Chrysler posted an operating loss of $1.7 billion (1.8 billion euros).
“We will be within the committed range and toward the better end of the range (for 2001),” Zetsche said of the Chrysler earnings outlook at a press briefing on the first day of the North American International Auto Show.
The turnaround plan assumed Chrysler would maintain about 14 % of the U.S. market, estimated at about 16 million vehicle sales a year. Last year, sales hit 17.1 million vehicles, but Chrysler’s market share fell to 13.2 percent as the company’s sales declined 10 percent.
