Uncertainty over the unstable political situation in some regions and a potential labour dispute in Germany might “negatively impact on the beginnings of economic recovery”, DaimlerChrysler said in a statement accompanying its first quarter results for 2002.
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The German-US car company reported a $US0.9 million operating profit for Q1 2002 compared with a $1.4 billion loss for the first quarter a year ago.
“Due to uncertainties regarding future economic developments DaimlerChrysler had been cautious in its initial planning for 2002. In the first quarter, markets generally developed better than had been expected,” DC said.
“There are now increasing signs that this positive trend might continue.”
DC now expects Mercedes-Benz and Smart division vehicle sales, revenue and profits to be similar to the high levels of last year and, assuming that the US market continues its positive trend, expects the struggling Chrysler group to do better than its targeted breakeven, possibly achieving “a positive result for the year”.
Despite weak global demand, DC expects its commercial vehicles division to achieve “positive operative earnings for the full year, at a higher level than in 2001”.
DaimlerChrysler is also assuming its services division will achieve a higher adjusted operating profit than in 2001.
The statement said that the recall scandal-plagued Mitsubishi Motors will continue to implement its turnaround plan and is expected to make “a positive contribution to Group earnings for 2002”.
“Despite the extremely difficult market situation, Mitsubishi Motors assumes that its unit sales in Japan will stabilise during the second half of its current financial year, which started on April 1, 2002,” the statement said.
DaimlerChrysler expects total revenues of around $131 billion in full-year 2002 (2001: $133.3 billion) and said that, compared with the prior year, negative effects will come from changes in the consolidated group, while there will be positive effects from changed exchange-rate assumptions and, to a certain extent, rising vehicle sales, particularly in the US.
Improved economic conditions and a recovery of DaimlerChrysler’s key markets would have a positive effect on the group’s earnings, the statement said, but added that, given the economic and political uncertainties, “conservative earnings expectations remain in place”.
