DaimlerChrysler (DCX) posted a small rise in first-quarter profit as the carmaker continues to struggle with costs related to its smart small-car unit.
The Stuttgart, Germany, company made $363 million, or 35 cents a share, for the quarter ended March 31, up from the year-ago $350 million, or 34 cents a share. Sales rose 17% from a year ago to $45.1 billion.
The company's supervisory board cleared the spending of an added $2.4 billion on the company's cost-cutting plans. DaimlerChrysler said its workforce shrank 5% over the last year to 368,853 people. The company said it plans to trim red tape by 20% this year in a job that will cut administrative jobs.
Vehicle sales rose 14% at Mercedes to 281,500 units, driving a 19% revenue rise. The unit turned an $823 million operating loss thanks to $1.2 billion in costs related to the smart restructuring. Excluding items, the Mercedes Car Group increased its operating profit significantly. This was due to higher unit sales and an improved model mix, resulting in particular from the launch of the new S-Class, M-Class and R-Class.
The Chrysler Group's first-quarter retail sales increased by 4% to 690,700 vehicles. The growth was primarily due to the market success of the new products launched in 2005, including the new Dodge Charger (31,400 units) and the Jeep Commander (20,200 units). Factory shipments in the first quarter increased by 4% to 695,400 vehicles.
Chrysler Group sales rose 17% in euros to 12.6 billion but only 7% in dollars. The unit's operating profit fell to $144 million from $306 million a year earlier.
The company forecast flat unit sales for 2006 and a slight rise in revenue from last year's $182 billion.
"Parallel to the development of the world economy, the dynamism of global demand for automobiles is likely to decrease slightly," the company said.