Mercedes delivers DCX profits; Chrysler Group likely to report another loss

By From Dow Jones Newswires| May 14 2007
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DaimlerChrysler AG is expected Tuesday to report that net profit more than quadrupled in the first quarter as its Mercedes Car Group division swung back into the black, while the troubled Chrysler Group likely will report another painful loss as talks about its future continue.

The world's fifth-largest auto maker by sales is expected to post a first-quarter net profit of 1.39 billion euros ($1.88 billion) compared with 299 million euros in the year-ago period, according to a Dow Jones Newswires survey of eight analysts.

DaimlerChrysler will report earnings under International Financial Reporting Standards, or IFRS, for the first time, changing over from U.S. GAAP.

The Mercedes division is expected to post earnings before interest and taxes, or EBIT, of 759 million euro ($1 billion) for the first quarter after last year's 678 million euro loss, which was triggered by a wide-ranging restructuring program.

Chrysler's loss is expected to be 856 million euros ($1.2 billion) in the first quarter after a 119 million euro operating profit in the year-ago period.

Analysts said that the strong rise in DaimlerChrysler's net profit is partly due to effects related to the changed accounting standard.

The automaker declined to provide adjusted IFRS earnings figures for last year ahead of Tuesday, which makes the comparison with the previous year's figures difficult.

The company will replace its operating profit under U.S. GAAP with earnings before interest and taxes, or EBIT.

DaimlerChrysler is expected to give further guidance on the outlook for the full year on Tuesday.

So far, DaimlerChrysler had said it expects slightly higher sales in 2007 after 4.7 million vehicles last year and revenues to come in at around last year's level of 152.8 billion euros.

Any indications on the status of the ongoing talks about Chrysler's future are expected to be in the limelight.

In February, DaimlerChrysler had announced that all options were open for the future of Chrysler and confirmed later that it is in talks with "potential partners."

However, the company hasn't given any further guidance yet on the current status of the talks.

Canadian auto supplier Magna International Inc. with partner Onex Corp., as well as private-equity firms Cerberus Capital Management and a team of Blackstone Partners and Centerbridge Capital are among the bidders as well as billionaire investor Kirk Kerkorian.

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