DaimlerChrysler posted a 19% drop in quarterly profits on Tuesday, falling short of market expectations, but stuck to its outlook for the full year, Reuters reported.
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DaimlerChrysler, which is battling to return its US Chrysler unit to long term profits, posted a third quarter operating profit of €1.25 billion ($US1.46 billion), the report said.
A Reuters poll of 30 analysts had put the average estimate for third-quarter operating profit at €1.41 billion.
Reuters said Chrysler returned to profit in the third quarter after a steep second-quarter loss and the company said it was still striving for a small operating profit at the division for the full year, although “significant risks” remained – many analysts believe that forecast is optimistic.
The news agency noted that Chrysler, along with General Motors and Ford, is suffering from a profit-eroding US price war, overcapacity and low productivity levels compared with Japanese rivals, which is hampering a return to sustainable profits.
DaimlerChrysler as whole, whose brands include Mercedes, Jeep and Freightliner, aims to post a full-year operating profit of about €5 billion, down from €5.8 billion in 2002, Reuters said.
The company also said it wrote down the value of its stake in aerospace group EADS by about €2billion, a previously flagged move which pushed the group to a net loss for the third quarter, Reuters added.
