reported much higher-than-expected profits and raised its full-year outlook Thursday morning due to stronger results in its Mercedes-Benz and Chrysler groups.

The company said net income for the quarter rose to $1.1 billion, or $1.08 a share, from $700 million, or 72 cents a share, in the year-ago quarter. Excluding special charges, DaimlerChrysler earned $1.2 billion, or $1.19 a share, up from 52 cents last year and ahead of analyst estimates of 75 cents.

Operating profit, excluding one-time charges, increased to $1.9 billion from $700 million, due primarily to the "strong improvement in profitability at Chrysler Group," where the company recently instituted a turnaround plan to help cut costs and improve sales.

Total revenue decreased 5% to $38.8 billion, down from $40.9 billion last year, while total vehicle sales were flat with last year at 1.3 million.

Revenue at the company's Mercedes-Benz division was up 5%, and operating profits increased 2%. "The sales trend for Mercedes-Benz cars continues to be better than that of the overall market ... despite difficult economic conditions," the company said.

At the Chrysler Group, sales increased 1% on stronger sales of minivans, the Dodge Ram pickup, the Chrysler PT Cruiser, and the Jeep Liberty. Operating profit in the division was up to $777 million from a loss of $146 million a year ago.

Looking ahead, DaimlerChrysler said it expects 2002 Mercedes-Benz division sales to match 2001 results, while the Chrysler Group should report positive operating profits for the year. The company as a whole raised its operating profit guidance to three times its 2001 results of $1.33 billion on revenue of $148 billion, up from an earlier forecast of operating profits about twice its 2001 results.

Shares of DaimlerChrysler closed at $46.70 Wednesday heading into its earnings release.