Chrysler division reports $2B loss [Archive] - Ford Inside News Community

: Chrysler division reports $2B loss

05-16-2007, 03:06 PM
Detroit News: Chrysler division reports $2B loss
Christine Tierney / The Detroit News

DaimlerChrysler AG reported a $2 billion first-quarter loss for its soon-to-be-sold Chrysler division Tuesday, but predicted Chrysler's results would approach break-even for the rest of the year.

Chrysler's quarterly loss includes a $1.2 billion charge for a restructuring announced on Feb. 14 -- the same day DaimlerChrysler CEO Dieter Zetsche said publicly that the Auburn Hills automaker was up for sale.
DaimlerChrysler Chief Financial Officer Bodo Uebber forecast a $2.1 billion full-year loss for Chrysler, before interest and taxes, in a teleconference with reporters and financial analysts.

Analysts said the forecast, which assumes a big improvement in Chrysler's earnings in the current quarter and second half of 2007, might be bullish.
"I think that's overly optimistic. I think it's going to be very difficult," said New York-based analyst Brad Rubin at investment bank BNP-Paribas.
But Chrysler is counting on the rollout of new vehicles to boost its results. It recently launched the Dodge Avenger sedan and is bringing out new minivans in the fall.

Despite Chrysler's poor first-quarter earnings, DaimlerChrysler's net profit for the January-March period more than doubled to $2.6 billion, reflecting a turnaround at its resurgent Mercedes-Benz luxury car-making division and income from its holding in the aerospace company EADS.

Uebber said the company's earnings for 2007, before interest and taxes, would be slightly above $9 billion, but yearly net profit would be undercut by costs related to the Chrysler sale. It estimates those costs will run between $4 billion and $5 billion.