Chrysler doubles profits to dollars 777m

Click to follow
CHRYSLER, the number three American car maker, was confirmed as the corporate turnaround story of 1993 yesterday, turning in profits more than double those of a year ago despite turnover only 20 per cent higher.

Chrysler's fourth-quarter results - dollars 777m, or dollars 2.11 a share - set a record for the company, which teetered on the edge of bankruptcy only 18 months ago. Profit per vehicle rose to dollars 1,335 in 1993 - dollars 1,727 in the final quarter - from only dollars 335 in 1992.

For the year, Chrysler lost dollars 2.55bn, or dollars 7.62 cents a share, after a one-off accounting charge of dollars 4.68bn. Pre-tax, the company made a record dollars 1.2bn, compared with dollars 646bn in 1992 - the first time it has set a new annual earnings record since 1984.

Most of the growth in Chrysler's profitability is the result of lower sales incentives, which were less than half of what they were the year before. Higher prices for competing Japanese products allowed it to cut its prices.

For the year, Chrysler sold 542,000 cars in North America, up from just over 500,000 in 1992.

The company also managed to reduce its pension liability to dollars 2.2bn from dollars 3.9bn at the beginning of the year. The liability should be completely eliminated by the end of next year, the company said.

Despite a series of unexpectedly strong quarterly results, the year-end numbers again caught Wall Street off-guard. Its shares were up 11 4 to dollars 63 on the announcement; two years ago, they were trading at dollars 13.