Update on Financial Performance and Outlook for Full-Year 2006
15 Septembre 2006 - 3:37PM
PR Newswire (US)
* Chrysler Group expects loss of euro 1.2 billion ($1.5 billion) in
the third quarter, strives to achieve positive results in fourth
quarter STUTTGART, Germany, Sept. 15 /PRNewswire-FirstCall/ --
DaimlerChrysler (stock exchange abbreviation DCX) lowered its
operating profit forecast for full-year 2006 to be in the magnitude
of euro 5 billion ($6.4 billion) based on an expected full-year
operating loss of approximately euro 1.0 billion ($1.2 billion) for
its Chrysler Group. Chrysler Group had earlier announced an
anticipated operating loss of up to euro 0.5 billion ($0.6 billion)
in the third quarter which is now expected to be at euro 1.2
billion ($1.5 billion). The Chrysler Group is facing a difficult
market environment in the United States with excess inventory,
non-competitive legacy costs for employees and retirees, continuing
high fuel prices and a stronger shift in demand toward smaller
vehicles. At the same time, key competitors have further increased
margin and volume pressures -- particularly on light trucks -- by
making significant price concessions. In addition, increased
interest rates caused higher sales & marketing expenses.
Chrysler Group will take additional production cuts in the third
and fourth quarters to reduce dealer inventories and make way for
its current product offensive. In the third quarter, the Chrysler
Group was unable to follow customer demand with its existing
product portfolio, as customers shifted towards smaller vehicles.
However, in the second half of the year, the Chrysler Group will
introduce a total of eight new vehicles, of which many are in the
growing small vehicle segment. Like the Dodge Caliber, which was
launched in second quarter 2006, the Jeep(R) Compass, Jeep Patriot
and the new Chrysler Sebring are equipped with the fuel-efficient,
2.4 liter, four cylinder World Engine and offer better than 30
miles per gallon highway mileage. Also this year, the Chrysler
Group will offer the smallest Dodge SUV in history, the Dodge Nitro
as well as an all-new version of the quintessential Jeep Wrangler.
After the anticipated loss of euro 1.2 billion ($1.5 billion) in
the third quarter the Chrysler Group strives to achieve positive
results in the fourth quarter. DaimlerChrysler is forecasting that
the Chrysler Group will end 2006 as a whole with a loss in the
magnitude of approximately euro 1 billion ($1.2 billion). Earnings
development at the Mercedes Car Group, the Truck Group, Financial
Services and Van, Bus, Other segment is fully in line with
planning. As a result of this reassessment of the earnings
situation at the Chrysler Group, the earnings forecast for the
DaimlerChrysler Group must also be adjusted. DaimlerChrysler is now
assuming that the operating profit for 2006 will be in the
magnitude of euro 5 billion ($6.4 billion). This figure includes
charges for the implementation of the new management model (euro
0.5 billion; $0.6 billion), the focus on the smart fortwo (euro 1
billion; $1.2 billion), the staff reductions at the Mercedes Car
Group (euro 0.4 billion; $0.5 billion), as well as gains on the
disposal of the off-highway business (euro 0.2 billion; $ 0.2
billion), on the sale of real estate no longer required for
operating purposes (euro 0.1 billion; $0.1 billion) and the release
of provisions for retirement-pension obligations (euro 0.2 billion;
$0.2 billion). In its half-year report, EADS indicated that the
review of the Airbus program could lead to a reduction of earnings.
DaimlerChrysler's updated earnings forecast does not yet include
these potential effects on its earnings. In order to improve the
earnings situation of the Chrysler Group as quickly,
comprehensively and sustainably as possible, measures to increase
sales and cut costs in the short term are being examined at all
stages of the value chain, in addition to structural changes being
reviewed as well. The positive development of volumes and earnings
in Mexico and Canada as well as in other international markets also
offer opportunities for further improvements. For the reader's
convenience, the financial information has been translated from
euros into U.S. dollars at an assumed rate of euro 1 = $1.2723
(official buying or selling rate on September 14, 2006). The
convenience translation does not mean that the euro amounts
actually represent the corresponding dollar amount stated or could
be converted into dollars at the assumed rate. This document
contains forward-looking statements that reflect management's
current views with respect to future events. The words
"anticipate," "assume," "believe," "estimate," "expect," "intend,"
"may," "plan," "project" and "should" and similar expressions
identify forward- looking statements. Such statements are subject
to risks and uncertainties, including, but not limited to: an
economic downturn in Europe or North America; changes in currency
ex-change rates, interest rates and in raw material prices;
introduction of competing products; increased sales incentives; the
effective implementation of our New Management Model, and the CORE
program, including the new business model for smart, at the
Mercedes Car Group; renewed pressure to reduce costs in light of
restructuring plans announced by our major competitors in NAFTA;
disruption of production or vehicle deliveries, resulting from
shortages, labor strikes or supplier insolvencies; the resolution
of pending governmental investigations; and decline in resale
prices of used vehicles. If any of these or other risks and
uncertainties occur (some of which are described under the heading
"Risk Report" in DaimlerChrysler's most recent Annual Report and
under the heading "Risk Factors" in DaimlerChrysler's most recent
Annual Report on Form 20-F filed with the Securities and Exchange
Commission), or if the assumptions underlying any of these
statements prove incorrect, then actual results may be materially
different from those expressed or implied by such statements. We do
not intend or assume any obligation to update any forward-looking
statement, which speaks only as of the date on which it is made.
Further information from DaimlerChrysler is available on the
internet at: http://www.media.daimlerchrysler.com/
http://www.newscom.com/cgi-bin/prnh/20020212/DCXLOGO
http://photoarchive.ap.org/ DATASOURCE: DaimlerChrysler AG CONTACT:
Thomas Froehlich, +49-(0)-711/17-9-33-11; or Han Tjan,
+1-212-909-9063; or Jason Vines, +1-248-512-3164; or Mike Aberlich,
+1-248-512-2704 Web site: http://www.daimlerchrysler.com/
http://www.media.daimlerchrysler.com/
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