NEW YORK (CNN/Money) - DaimlerChrysler reported about a 90 percent decline in earnings as its Chrysler unit drove deep into the red in the second quarter, but it still managed to beat Wall Street expectations.

The world's No. 3 automaker in terms of revenue earned 109 million, or 0.11 a share. That works out to $125 million, or 13 cents a share, down from $1.3 billion, or $1.27 a share, a year earlier. Analysts surveyed by earnings tracker First Call were looking for earnings per share of 7 cents.

The Chrysler Group, its North American operation and largest unit, posted a $1 billion loss, compared with a $495 million profit a year earlier, as sales fell while the cost of incentives needed to attract buyers increased.

The Mercedes group saw operating profit increase 2 percent, to 861 million, while the commercial vehicles division posted a 211 million operating profit compared with a 7 million loss a year earlier.

The company warned it did not see any momentum for economic growth or improved auto sales heading into the third quarter.

"The worldwide upswing that had been hoped for in the second quarter of 2003 did not materialize," said the company's statement. "Even lower unit sales were only avoided by offering customers higher incentives. Demand also declined in the automotive markets of Western Europe. We expect demand for passenger cars to remain at a low level for some time."

The German-based company saw revenue fall 13 percent, to $39.5 billion, although the dip would have been only 2 percent without the decline in the value of dollar compared to the euro during the last year.

Shares of DaimlerChrysler (DCX: Research, Estimates) were up about 2.2 percent in Frankfurt trading immediately after the report. Shares closed up 25 cents, to $34.70, in U.S. trading Wednesday.