LONDON (CNNfn) - Intense competition in North America took a bite out of DaimlerChrysler's first-quarter earnings, the automaker said Wednesday, although the German-U.S. company sold more vehicles than in the prior-year period.|
Revenue for the three months ended Mar. 31 jumped 17 percent to 41 billion ($39.2 billion), but operating earnings slipped 3 percent to 2.45 billion from 2.53 billion a year ago. Net income rose 3 percent to 1.69 billion due to the effect of one-time items, and earnings per share rose a similar amount to 1.69.
"The results were a little disappointing, toward the bottom of expectations," commented Gavin Launder, an auto analyst at Warburg Dillon Read in London. "There's no reason to panic for the full year," added the analyst, who predicted a near 10 percent increase in 2000 earnings per share to 6.70.
The shortfall came at the Chrysler car and truck division, which reported a 7 percent slide in operating profit to 1.4 billion even though it shipped 923,600 vehicles, an increase of 10 percent, and raised revenue 10 percent to 19.0 billion. The company blamed increased competition and the cost of introducing new products. It warned that competitive pressures would remain stiff.
Chrysler's crucial minivan is due to be replaced later this year, which analysts said should boost profits further down the line.
Growth at Mercedes-Benz passenger cars remained in the fast lane during the period. Vehicle sales rose 7 percent to 260,000 units, revenue rose 17 percent to 9.9 billion and operating profit gained 11 percent to 591 million, even as the company incurred launch costs for the new version of the medium-sized C-class model. DaimlerChrysler pointed out that orders in Germany alone were raining in at 1,200 a day. The C-class will contribute to earnings from the second quarter, but should kick in fully in the second half of the year.
"From today's perspective we anticipate a further increase in earnings per share for the full year," Chairman Jürgen Schrempp said in a statement.
The company is due to publish more details of its quarterly earnings on May 3.
Daimler (FDCX) stock fell 1 percent to 67.60 in Frankfurt Wednesday morning.