DaimlerChrysler: We'll post profits

BERLIN - DaimlerChrysler AG said it expects to post an operating profit of about 1.2 billion euros ($1.08 billion) for 2001, sharply below the previous year but enough to reassure investors that a costly turnaround plan for its ailing Chrysler unit is on track. <br> <br> The world&#39;s No. 5 carmaker had said previously it expected an operating profit - which excludes interest and taxes - of between 1.2 billion euros and 1.7 billion euros. Its operating profit for 2000 was 5.2 billion euros. <br> <br> But chief executive Juergen Schrempp said last month that profits would be at ``the lower end&#39;&#39; of the range because of the slowing world economy and the economic shock of the Sept. 11 terrorist attacks. <br> <br> The company&#39;s shares rose sharply after Friday&#39;s announcement, in which it said Chrysler ``significantly exceeded&#39;&#39; cost-cutting goals set last year and was on course to meet its earnings target for 2001. <br> <br> In Frankfurt, DaimlerChrysler rose 3.7 percent to 51 euros ($46) a share. Its shares traded on the New York Stock Exchange gained 2.8 percent, or $1.22, to close at $45.62. <br> <br> ``It&#39;s a good interim report,&#39;&#39; said Albrecht Denninghoff, an analyst at Bayerische Hypo-Vereinsbank in Munich. ``The U.S. market will weaken further next year, but they&#39;ve done a good job on cutting back inventory and production.&#39;&#39; <br> <br> Schrempp launched a $3.9 billion, three-year rescue plan in February aimed at slashing costs and reviving the appeal of Chrysler&#39;s vehicles to return it to profit by 2003. The plan calls for about 35,000 job cuts at Chrysler and Japan&#39;s Mitsubishi Motors Corp., which is 37.3 percent owned by DaimlerChrysler. <br> <br> According to preliminary sales figures, DaimlerChrysler&#39;s revenue was about 150 billion euros ($135 billion) last year, down from 162 billion euros in 2000. Unit vehicle sales were down to 4.45 million from 4.75 million, despite record sales of its Mercedes-Benz and Smart cars. <br> <br> Chrysler shipped just under 2.74 million vehicles in 2001, down from 3.05 million in 2000. Revenues are seen at 62 billion euros ($55.8 billion) compared with 68.4 billion euros the previous year, the company said. <br> <br> To revive flagging U.S. sales in the wake of the Sept. 11 attacks, automakers including Chrysler, General Motors and Ford began offering zero-percent financing - a costly measure which could erode earnings. <br> <br> ``The great unknown for 2002 is how long this will continue,&#39;&#39; Denninghoff said. ``Complete faith in the management will only be restored when Chrysler really is back in profit.&#39;&#39; <br> <br> DaimlerChrysler also reaffirmed its expectation that Mitsubishi will break even in the financial year ending March 2002. It said revenues were almost unchanged last year from 2000 at about $11.6 billion. <br> <br> Citing difficult market conditions in the United States, Turkey, Central Europe and Latin America, DaimlerChrysler said its commercial vehicles sales fell 5 percent to 28 billion euros ($25.2 billion) in 2001. The number of vehicles sold fell to 492,000 from 549,000. <br> <br> Nevertheless, DaimlerChrysler said a turnaround plan for the Freightliner truck and bus business also is on track.