Chrysler recovers with dollars 723m profit

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The Independent Online
CHRYSLER yesterday completed an impressive recovery year, posting better-than-expected fourth-quarter results on the eve of a dollars 1.6bn (pounds 1.05bn) offering of new shares by the car maker.

Chrysler earned dollars 356m, or dollars 1.12 a share, in the final three months of 1992 compared with a gain of dollars 97m in the quarter a year earlier. For the whole of 1992, Chrysler made a profit of dollars 723m. Its loss in 1991 of dollars 795m prompted many observers to fear for its survival.

Revenues rose sharply to dollars 10.2bn from dollars 8.2bn in the fourth quarter, reflecting Chrysler's better mix of products, including its new line of LH saloons. Both volumes and margin were up while sales costs continued to decline.

'Our ongoing cost reductions continue to bear fruit,' said Robert Eaton, chief executive, who took over from the chairman Lee Iacocca at the end of the year.

Chrysler plans to offer 40 million shares to the public next week in a massive refinancing programme that involves most of Wall Street's underwriters. The company has been largely excluded from public debt markets because of its 'below-investment grade' credit rating.

'Neither our balance sheet nor our credit rating are where we want them to be,' Mr Eaton said. He expressed caution about prospects for 1993, noting that the US recovery continued to be slow.

Analysts said the fourth quarter results were slightly better than expected, even though the company had indicated it would report strong sales earlier this month in announcing the equity issue.

Chrysler shares added 37.5 cents to dollars 39.50 on the news.

The company also said that its Chrysler Financial subsidiary expected to receive about dollars 2.2bn during the current quarter from the previously announced sale of its consumer and deal financing business to NationsBank.