DaimlerChrysler back in black

DaimlerChrysler employee checks orders for Jeep Grand Cherokees

STUTTGART, Germany (CNN) -- DaimlerChrysler returned to profitability in the first quarter as it closed factories and shed workers in a bid to drive its Chrysler unit out of losses.

In the first three months to March 31, the world's third biggest carmaker had a net income of 2.62 billion euros ($2.32 billion), or 2.63 euros a share. That compares with a loss of 2.35 billion euros, or 2.35 euros a share, a year earlier. Sales rose almost 4 percent to 36.9 billion euros.

Chrysler turned in an operating profit excluding one-time items of 127 million euros, compared with an operating loss of 1.4 billion in the first quarter of 2001. Chrysler's move back into the black was the first in six consecutive quarters and comes after the company laid off 26,000 workers and closed factories.

"With the continuation of the positive market trend in the United States, Chrysler Group may do better than its targeted breakeven, and could achieve positive earnings for the year," the company said in a statement.

DaimlerChrysler's (FDCX) stock, which has risen more than 7 percent this year, fell 3.4 percent to 50.85 euros in midday Frankfurt trading.