* DCX reports improving 3Q05 results:
DCX reported improving 3Q05 consolidated results with revenues
increasing 9.4% yoy to EUR38.2 billion and group operating profit
increasing 38.0% to EUR1.8 billion. The increase in profits was driven by
improvements at Mercedes, Chrysler, and Commercial Vehicles.
* Further improvement in profitability expected:
We expect the company to show further improvement in profitability in
coming quarters driven by new models, health care cost reductions, and
cost efficiencies.
* Risks:
Risks include aggressive industry pricing, high gas prices, and the
potential for further restructuring charges.
* We change opinion to "Outperform" from "Market Perform":
In light of our expectation for improvement in credit metrics we change
the Credit Trend to "Improving" from "Stable" and our opinion to
"Outperform" from "Market Perform". We rate DCX "BBB".