Chrysler Says Discounts May Cut Profit
Chrysler Corp. said discounts it’s offering to longtime customers could trim second-quarter earnings by as much as 15 cents a share, an early indication that the latest battle in the industry’s price wars could prove painful. Chrysler had been expected to earn $1.45 a diluted share in the second quarter, up from 70 cents in the year-ago period, when profit was depressed by a strike, according to an analysts survey by IBES International Inc. Auburn Hills, Mich.-based Chrysler told analysts it was forced to offer the loyalty discounts after General Motors Corp. and Ford Motor Co. announced similar programs. Chrysler told analysts it doesn’t want to continue or replace the discounts beyond their scheduled July 2 expiration. The discounts range from $500 to $1,000 a vehicle. Chrysler shares fell 44 cents to close at $39.56 on the NYSE.