Ford (NYSE:F) reports blowout profit gains. General Motors (NYSE:GM) surprises with outstanding earnings. DaimlerChrysler (NYSE:DCX) is "earnings challenged." So much for the Big Three.

A 33% plunge in first-quarter earnings notwithstanding, a Daimler release trumpets a 10% increase in operating profit. By all indications, gains at Chrysler and the Commercial Vehicles division helped mask declines at the Mercedes Car Group and Services divisions.

But, as pleasing as that new car aroma is, Daimler's 4.8% operating margins are less rosy when compared to the better-than-8% margins driven home by Toyota (NYSE:TM) and Honda (NYSE:HMC). Add in debt that exceeds $70 billion, and you start to see just how "challenged" Daimler has become.

Going forward, management "expects to achieve an improvement in operating profits for the full year compared with 2003 results." Ah, those operating profits just keep popping up. So, what's dragging on net income? "Lower financial results and higher taxes." Because those are real dollars not making it to the bottom line, net income matters -- and it appears headed for another challenging year.

Yet, one more curve in the road will be how Daimler accounts for its investment in Mitsubishi Motors. On April 22, Daimler decided to stop capital funding for its percentage of Mitsubishi. While management expects the net effect to bolster results, that remains to be seen.

When Daimler closed out fiscal 2003, Chrysler had sold fewer cars, lost money, and took a huge restructuring charge. Fortunately, that drag on earnings has been reversed. Unfortunately, with analysts projecting earnings of $3.52 this year, the stock still trades at a forward P/E of 13 times. That's hardly cheap.

By comparison, GM, Ford, and Honda trade at less than 10 times forward earnings. Toyota goes at 14 times. Given the alternatives, you have to wonder why investors are paying so much for earnings-challenged DaimlerChrysler.

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Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.