DaimlerChrysler has reported a big profit turnaround for the third quarter of 2004. Net income rose to $1.2 billion from a loss of $2.1 billion in Q3 2004 while group operating profit increased from $1.5 billion to $1.7 billion despite high exceptional charges.
Net income in the first nine months of 2004 rose to $2.4 billion from a net loss of $1.2 billion a year ago.
The operating profit for the third quarter included exceptional charges from Mitsubishi Fuso Truck and Bus Corporation ($503 million), Toll Collect ($148 million) and the Chrysler Group ($129 million) offset by exceptional income from the settlement DaimlerChrysler reached with Bombardier in respect of the sale of Adtranz ($149 million) and from the ending of the truck-engine joint venture with Hyundai ($75 million). The impact on the operating profit from these special effects was $556 million.
Earnings per share improved to $1.17 in Q3 2004 compared with a loss per share of $2.02 a year previously.
Operating profit for the first nine months of the year increased 51% to $6.2 billion. Earnings per share for the first nine months amounted to $2.38, after a loss per share of $1.17 a year ago. Revenues rose 3% to $129.5 billion in the first nine months.
Against the backdrop of slightly weaker growth in the worldwide automobile economy, DaimlerChrysler sold 1.1 million vehicles in the third quarter, 2% ahead of Q3, 2003. Total revenues also increased 2% to $43.3 billion, despite the appreciation of the euro against the dollar, mainly due to higher unit sales.
Mercedes Car Group sales fell 4% to 293,200 vehicles in the third quarter and its operating profit of $377 million was lower than a year ago due, the company said, to model changeovers, high launch and startup costs for the second product offensive, and the costs of the ongoing comprehensive quality offensive. There was also a negative impact on earnings from the strength of the euro against the US dollar. At the Smart small car division, operating profit was “significantly” affected by higher marketing costs and lower unit sales of some models.
The Mercedes-Benz brand sold 256,600 vehicles worldwide compared to 273,900 a year ago. Weak demand in Western Europe, especially in Germany, decreased sales 13% to 155,800 vehicles but United States sales increased 12% to 56,400 vehicles.
The Smart brand sold 36,500 vehicles in the third quarter, the 16% increase reflecting sales of the newly launched forfour which accounted for 16,700 units.
Chrysler Group increased worldwide retail sales by 3% to 651,900 units in the third quarter of 2004.
For full-year 2004, DaimlerChrysler anticipates an increase in unit sales from 4.3 million to around 4.8 million and an increase in revenues from $169.4 billion to some $180 billion.