HIGHLAND PARK, Mich. -- Citing strong minivan sales and brisk demand for its new Jeep, Chrysler Corp. reported yesterday earnings of $178 million for the second quarter, far exceeding Wall Street's expectations.
Chrysler's first profit in 15 months followed first-quarter profits by Ford Motor Co. and General Motors Corp. and signals a steady recovery by the industry after record losses in 1991.
The earnings -- Chrysler's best in two years -- came to 54 cents a share, a sharp improvement over a loss of $212 million, or 95 cents a share, in the second quarter of 1991. Chrysler lost $13 million in the first quarter of this year as it spent heavily on the new Jeep Grand Cherokee.
"We are positively surprised," said Joseph Phillippi, an analyst at Shearson-Lehman Brothers in New York. "It says they're managing the business very well."
Chrysler's report set off a rally on Wall Street as some analysts predicted that GM and Ford would also post better-than-expected earnings. Ford is scheduled to report second-quarter earnings today; GM will do so next week.
Ford is expected to report earnings of about $1 a share, compared with a loss of 68 cents a share a year ago. GM is expected to report about 40 cents a share before a one-time charge of about 97 cents for the restructuring of its Hughes Aircraft unit. GM lost $1.44 a share in the second quarter of 1991.
Chrysler's stock yesterday rose $1.69, to $21.75. Ford rose $1.75, to $45.75, and GM rose $1.50, to $41.375. All three were among the most active stocks on the New York Stock Exchange.
Analysts said Chrysler, the smallest of the three domestic automakers, and No. 2 Ford have cut costs and increased productivity in the recent downturn, enabling them to make a profit despite the still-sluggish pace of vehicle sales.
GM, in the midst of a broad restructuring, has relied on its European operations to bolster its balance sheet. But the No. 1 automaker hopes to break even in North America by the end of the year.
As the pace of auto sales continues to pick up, analysts say, the industry should improve. But some industry observers warn that planned price increases by the Big Three on 1993 vehicles may halt a recovery.
"We've been through this before," said David Garrity, who follows the industry for McDonald & Co., an investment research firm. "When things show the slightest signs of improvement, one of the first things to go up in Detroit are prices, and they generally do it in advance of consumer income."
Chrysler announced price increases Monday of between 3 percent and 5 percent on its minivans and high-volume cars, after Ford's decision to raise most vehicle prices between 4 percent and 6 percent. GM is expected to follow suit.
Still, while costlier vehicles may turn some consumers away, pent-up demand will continue to fuel a recovery, analysts say. If consumer tastes continue in the same direction, Chrysler will benefit from the growing popularity of trucks, especially minivans and sport utility vehicles.