Chrysler reports 46% earnings gain in quarter Sport-utility vehicle sales strong in period before Daimler-Benz takeover

Auto industry

October 13, 1998|By BLOOMBERG NEWS

AUBURN HILLS, Mich. -- Chrysler Corp., the No. 3 U.S. automaker, said yesterday that third-quarter profit rose a surprisingly strong 46 percent on sales of sport-utility vehicles in the last quarter before it was bought by Daimler-Benz AG.

Net income jumped to $682 million, or $1.02 a share, from $466 million, or 69 cents a share before a charge in the year-earlier period. Chrysler was expected to earn 87 cents a share, the average estimate of analysts surveyed by First Call Corp.

The shares rose 50 cents, or 6 percent, to $44.25 yesterday.

The strong earnings bode well for Daimler-Benz, which sought Chrysler partly for its strong sales of sport-utility vehicles such as the Dodge Durango. The $33.63 billion planned stock and assumed-debt acquisition comes as Chrysler increases its market share, revamps its sedans and light trucks and boosts production.

"Chrysler is back on a roll," said Lehman Brothers Inc. analyst Joseph Phillippi. "The new products look like they'll be very successful."

Chrysler's revenue climbed 14 percent to $15 billion from $13.2 billion.

To attract buyers, Chrysler spent an average of $1,280 a vehicle on rebates and other incentives in the third quarter, up from $1,140 in the year-earlier period.

Chrysler Financial Corp., the company's automobile credit unit, said third-quarter profit rose 4.5 percent to $116 million from $111 million in the year-ago period.

In the year-earlier quarter, a charge of $25 million for discontinuing its Eagle car brand resulted in net income of $441 million, or 65 cents a share. There were no gains or charges in the most recent quarter.

For the nine months, net income rose 41 percent to $2.74 billion, or $4.14 a share, from $1.94 billion, or $2.82, a year earlier. Revenue for the first nine months climbed 12 percent to $48.8 billion from $43.7 billion.

Pub Date: 10/13/98

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