DaimlerChrysler AG said Wednesday that its Chrysler unit racked up mammoth losses last year, and it struck a conservative note for the company’s prospects this year.
The world’s fifth-biggest automaker posted a $1.14 billion adjusted operating profit for 2001, but that was dragged down by the results at Chrysler, which sank to an adjusted operating loss of $1.9 billion, compared with a profit of $462 million the previous year.
“This is a major slump,” said Chief Financial Officer Manfred Gentz. “The essential reason is the loss at Chrysler.”
DaimlerChrysler reported an operating profit, excluding one-time gains and losses, of $502 million in the fourth quarter, compared with a loss of $352 million a year ago. Chrysler had an operating loss of $320 million in the quarter, compared with a loss of $1.22 billion a year ago.
Chief Executive Juergen Schrempp declined to give a concrete outlook for 2002. “It is fairly clear guidance if we say the operating profit will be significantly more than double the previous year’s result, that means it will be more than [$2.3 billion],” Schrempp said.
That was interpreted by analysts as a profit warning since it fell far below the target range of $4.8 billion to $5.6 billion set a year ago.
Although the lowered profit prediction has raised speculation about the state of the Chrysler turnaround, Schrempp has said Chrysler’s target of breaking even this year remains unchanged. Company officials declined to say how they squared a slashed group forecast with maintaining the Chrysler break-even pledge.
DaimlerChrysler’s Mercedes-Benz division recorded an operating profit of $2.6 billion in 2001, up from $2.5 billion in 2000.
Chrysler shares gained $1.32, to $36.95, on the New York Stock Exchange.
“The shares haven’t had a good performance over the past few days, and they are correcting that on the belief that there’s no more bad news,” said Gerald Roessel, a fund manager at Invesco who specializes in car stocks.
