Chrysler's loss soars ahead of cuts

NEW YORK (CNNMoney.com) -- Losses continue to pile up at Chrysler Group in the fourth quarter, parent DaimlerChrysler reported Wednesday, as company officials prepared to unveil a restructuring of its North American unit that will likely include plant closings and elimination of about 10,000 factory workers.

The company announced that Chrysler's full-year loss was $1.48 billion. A year earlier, as competitors General Motors (Charts) and Ford Motor (Charts) struggled with losses from their auto operations, Chrysler Group posted a $2.02 billion profit.

DaimlerChrysler profits improved despite rising losses at its Chrysler unit.

Chrysler was hurt by declining sales, particularly in its pickup trucks and SUVs, as the company lost its long-held position as the No. 3 U.S. automaker to fall behind Toyota Motor (Charts) during the year. Honda Motor (Charts) also made gains at the expense of the traditional Big Three Detroit automakers.

Revenue at Chrysler Group fell to $62.2 billion for 2006 from $66.1 billion a year earlier, as the number of vehicles sold also fell 5 percent to 2.7 million.

Still, even with the loss at Chrysler, parent DaimlerChrysler (Charts) posted 2006 operating income of €5.52 billion in 2006, or $7.28 billion, up from €5.19 billion, or $6.84 billion, in 2005. The company saw substantial earnings improvement at the Mercedes Car Group as well as further earnings gains at its truck group and financial services unit.

Net income for the company after a series of special charges came to €3.2 billion, or $4.3 billion, up from €2.8 billion, or $3.8 billion a year earlier. Based on the reported net income, earnings per share amounted to €3.16, or $4.17 a share, up from €2.80 a share, or $3.70, in 2005.

The company said based on the divisions' projections, DaimlerChrysler should achieve a significant increase in profitability in the planning period of 2007 through 2009. But it did not give any specific earnings targets. And it did not detail restructuring plans, which are expected to be announced at 9 a.m. ET Wednesday, then detailed in a series of conference calls with reporters and analysts.

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