Chrysler May Cut Its Quarterly Dividend

Chrysler Corp.’s 30-cent quarterly dividend comes up for review today amid speculation that the No. 3 auto maker may cut or eliminate it.

There was no clear indication Wednesday which way the board was leaning, but some analysts said reducing or wiping out the dividend is likely.

“I think it’s prudent to eliminate,” said auto analyst Charles Brady of Oppenheimer & Co. “I think it’s more of a psychological signal of sorts. You’re sending out a message that you’re financially concerned.”

Worry over the fate of the dividend may have contributed Wednesday to a drop in Chrysler’s stock price. On the New York Stock Exchange, Chrysler closed at $13.875, down 50 cents a share.

Under Chrysler’s dividend policy, the company pays $268 million a year to shareholders.

Chrysler reported a $31-million profit in the fourth quarter last year. But that was tempered by a $63-million gain on lower-than-expected plant closing costs. Without the credit, Chrysler would have lost $32 million.

GM and Ford reported fourth-quarter losses of $1.6 billion and $519 million, respectively.

GM cut its quarterly dividend to 40 from 75 cents a share at a meeting last month, saving about $831 million annually. Ford resisted the temptation in January, but it will reconsider the 75-cent shareholder payout next month.