Chrysler Profits Drop 47% in Quarter

Chrysler Corp. said today that its second-quarter profit plunged 47.2% from last year, mainly because of incentive costs.

The company said it earned $180 million, or 81 cents a share, during the April through June period, compared to $341 million, or $1.46 a share, during the same period last year. Second-quarter earnings last year were inflated by $8 million from the sale of Chrysler’s Gulfstream Aerospace subsidiary.

Without the Gulfstream sale, its profit would have been off 46% from results of $333 million, or $1.42 a share, a year ago.

Revenues fell 11.1%, to $8.8 billion from $9.9 billion during the April-June period last year.

“If not for the huge year-to-year increase in per-unit incentive costs, we would have made more money this quarter than we did in the second quarter of 1989,” Chrysler Chairman Lee A. Iacocca said. The company will not say specifically how much it spent on incentives during the quarter, but spokesman Tom Houston said it was more than $1,000 for every car and truck sold.

Chrysler’s earnings were in line with Wall Street analysts’ expectations.

For the first half of this year, Chrysler’s earnings fell 63.7%, to $251 million, or $1.13 a share, from $692 million, or $2.96 a share, last year.