German-American car maker DaimlerChrysler said this morning its Q4 income dropped 40% (from $1.275b to $761m) on revenues of $53.7b (vs. $54.7 in 2005). EPS was down from $1.25 to $0.74, missing analyst estimates of $0.85. Its U.S. division, Chrysler Group, swung to a $164m loss (vs. $565 in 2005), while its Mercedes Car Group saw strong profits of $1.7b (vs. $1m), and its truck group more than tripled its Q4 2005 profits ($643m v. $190m). Sales in the three units were largely the same as Q4 2005. Addressing its Chrysler Group loss, the company said it was "primarily the result of negative net pricing, unfavorable product and sales market mix, and a decline in factory unit sales... These factors reflect the continuing difficult market environment in the United States during 2006 marked by an overall decline in market volume [and] a shift in consumer demand towards smaller, more fuel-efficient vehicles." Closely monitored full year operating profits were $7.17b (€5.52b), ahead of its targets of €5b. Also this morning, the company said it is considering "far-reaching strategic options with partners" and that "no option is being excluded" with regard to its Chrysler Group holding. See full story.
Sources: Press Release, MarketWatch, Wall Street Journal
Commentary: New Direction for DaimlerChrysler? • Project X: Chrysler 's Bold Revitalization Plan • DaimlerChrysler Earnings Conference Call Transcript (later today)
Stocks/ETFs to watch: DaimlerChrysler (DCX). Competitors: General Motors Corp. (NYSE:GM), Ford Motor Co. (NYSE:F), Toyota Motor Corp. (NYSE:TM), Honda Motor Co. (NYSE:HMC), Nissan Motor Company Ltd. (OTCPK:NSANY). ETFs: iShares Dow Jones Transportation Index ETF (NYSEARCA:IYT)
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