Chrysler 4th-Quarter Profit Zooms

Chrysler Corp. said Thursday that it earned $356 million in the fourth quarter, the third straight period that the rebounding auto maker has outperformed Wall Street estimates.

Chrysler’s earnings translated to $1.12 a share, surpassing the analysts’ consensus prediction of 91 cents a share.

For the year, Chrysler earned $723 million, or $2.21 a share, more than a $1.5-billion reversal of its 1991 loss of $795 million, or $3.28 a share.

Whispers at that time about the auto maker’s ability to survive have turned into a chorus of praise for its new cars and trucks and the Japanese-style production methods it uses to build them.

“Nothing will slow this down,” said Ted Shasta, an institutional investor with Loomis, Sayles & Co. in Boston. “The only adversary or enemy they have is themselves, if they blow a product. Even if the market stagnates, it doesn’t matter because they’re going to keep taking share.”

The earnings will also contribute to the first profit-sharing checks for hourly Chrysler workers in four years.

The No. 3 U.S. auto maker gained a full point of market share, from 12.4% to 13.4% in 1992, and analysts expect Chrysler will be the only Big Three auto maker to show a profit for last year.

General Motors Corp. and Ford Motor Co. are expected to report 1992 losses next month, mostly because of poor sales in stagnating European economies. Chrysler was spared because most of its European sales are exports from North America.

Chrysler’s fourth-quarter sales improved 24.3% to $10.2 billion, boosted by its sleek, new LH mid-size cars. The company also had sales records for its minivans and Jeeps, including the high-profit Grand Cherokee.

Fourth-quarter 1991 sales were $8.2 billion.

Chrysler Financial Corp., the auto maker’s financing subsidiary, earned $26 million in the fourth quarter, down 31.5% from $38 million in the fourth quarter of 1991. Annual profit was $231 million, off 19.5% from $276 million in 1991.

The financing subsidiary has been shrinking from the sale of non-automotive businesses, including its consumer finance unit, which was sold to Nationsbank.

For the year, Chrysler sales were a record $36.9 billion, up 25.5% from $29.4 billion in 1991. The previous record was $31 billion in 1988.

“By most measures, Chrysler had a very good year in 1992,” Chairman Robert J. Eaton and President Robert A. Lutz said in a joint statement. “Volumes and margins were up for the year while incentive costs were lower, and our ongoing cost-reduction efforts continued to bear fruit.”

But the executives were not complacent, warning: “The economic recovery in the United States continues to be slow, and neither our balance sheet nor our credit rating are where we want them to be.

“So despite the gains achieved in 1992, we still have major challenges ahead of us for 1993.”

Among them is deciding how to take a $4.7-billion charge resulting from an accounting change in the way retiree health benefits are calculated. Chrysler could write off the entire amount this quarter or spread it out over the next 20 years, as accounting rules allow.

Other U.S. companies are also grappling with how to provide for these changes.

Chrysler stock was up 75 cents at $39.875 a share Thursday on the New York Stock Exchange.