Mercedes loss cuts Daimler's profit >By Jeremy Peters The New York Times >FRIDAY, APRIL 29, 2005>

DETROIT Heavy losses at the Mercedes car group continued to slow profit at>DaimlerChrysler as the German-American conglomerate saw its earnings>reduced by nearly a third in the first quarter. >

Saddled with the high cost of restructuring its struggling Smart minicar>brand, Mercedes' operating profit vanished compared with a year earlier.>The luxury automaker, swung to a loss of $1.24 billion in the first>quarter because of Smart's woes and declining sales of aging Mercedes-Benz>model­s. In the first quarter last year, Mercedes posted an operating>profit of $829 million.>

For the Chrysler Group, which has become Daimler's profit engine as sales>at Mercedes lagged, the first-quarter showed signs that business may be>cooling. Chrysler's operating profit of $327 million in the quarter was>down 17 percent from the same period a year earlier.>

Daimler said a 3 percent decrease in factory sales combined with a weak>dollar and a competitive U.S. market drove down Chrysler's operating>profit and revenue.>

Over all, DaimlerChrysler's first-quarter net income dropped 30 percent to>$374 million. Although its profit slipped, the company still widely beat>Wall Street's expectations. >

Daimler attributed its slowed profitability to a number of factors both>inside and outside the company, including a weakened dollar and the high>cost of raw materials.>