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Old 02-07-2002, 11:38 AM
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DaimlerChrysler Posts Loss for '01

DaimlerChrysler Posts Loss for '01


FRANKFURT, Germany (AP) - DaimlerChrysler AG said Wednesday it would slash its dividend after posting a loss for 2001 as it struggles to push through a reorganization focused on its ailing Chrysler division.

The world's fifth biggest auto company said it wouldn't make its operating earnings targets for 2002 - moew bad news that helped push the company's stock down.

DaimlerChrysler shares were down 4.7 percent to 42.64 euros ($36.67) in afternoon trading on the Frankfurt exchange. In afternoon trading on the New York Stock Exchange, its shares were down 58 cents at $37.40.

The company said it was cutting its dividend to 1.00 euro (86 cents) per share, from 2.35 euros in 2000 because of its poor results.

DaimlerChrysler, headquartered in Stuttgart, Germany and Auburn Hills, Mich., has been battered by the fallout of the Sept. 11 terror attacks and by brutal price-cutting on the crucial U.S. auto market.

The company has also incurred billions in one-time charges to restructure Chrysler and its Freightliner truck maker in the United States.

The company said it lost 662 million euros ($589 million) for 2001 versus a profit of 7.89 billion euros a year ago. Revenue fell to 153 billion euros ($136 billion) from 162 billion euros a year ago.

Releasing some other key figures ahead of its Feb. 20 annual news conference, the company said it had an operating profit of 1.3 billion euros ($1.1 billion) adjusted to exclude one-time charges and financial items like taxes and interest in 2001. That was at the lower end of its target range of 1.2 billion euros to 1.7 billion euros ($1 billion-$1.5 billion).

The company previously indicated it would reach at least 1.2 billion euros ($1 billion) in operating profit, a number watched by analysts since it is believed to show the clearest picture of the company's core business.

At the same time, DaimlerChrysler said its 2002 goal of an adjusted operating profit of 5.5 billion euros to 6.5 billion euros ($4.7 billion to $5.6 billion) would not be met until later.

The original projections, made in February 2001, "were based on assumptions that more favorable economic conditions would prevail. The reality is that the fundamentals have become more uncertain and the task more challenging," the company said in a statement.

Still, 2002 operating profits would be more than twice the 2001 figure of 1.3 billion euros ($1.1 billion) it forecast, but didn't say how much more.

"DaimlerChrysler is confident that it will take profits to much higher levels in the future," the statement read.

The 2001 numbers "are actually OK," said Krista Kepler, an analyst at Merck Finck and Co. in Munich. Given the cost or the reorganization, the net loss is relatively modest, she said.

More troubling was the 2002 outlook, which wasn't accompanied by a full explanation of why earnings would fall short, she said.

"The general rationale everywhere is weaker markets, but they didn't say which market and which division," Kepler said. "There's no indication whether this is stuff that's been addressed or stuff that is going to have to be addressed."

AP-NY-02-06-02 1303EST
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