Chrysler Reports Second Quarter 1997 Results
11 July 1997
Chrysler Reports Second Quarter 1997 Results
AUBURN HILLS, Mich., July 11 -- Chrysler Corporation
today reported second-quarter 1997 net earnings of $483 million, or
$0.70 per common share ($0.70 per fully diluted common share), compared to
second-quarter 1996 net earnings of $1.037 billion, or $1.39 per common share
($1.38 per fully diluted common share). Pretax earnings for the second
quarter of 1997 were $811 million compared with $1.72 billion for the second
quarter of 1996.
Second-quarter 1997 earnings included an estimated unfavorable impact of
approximately $730 million pretax ($438 million after taxes) related to a
29-day strike at an engine plant in Detroit that temporarily shut down seven
of Chrysler's assembly plants.
Second-quarter 1996 earnings included a $101 million gain ($87 million
after taxes), related to the sale of Electrospace Systems, Inc., and Chrysler
Technologies Airborne Systems, Inc., and a $65 million charge ($100 million
after taxes) for the write-down of Thrifty Rent-A-Car System, Inc.
"The second quarter was a very difficult one for Chrysler. Our results
were significantly affected by the UAW strike -- our vehicle shipments were
reduced by an estimated 89,000 units," said Chrysler Chairman Robert J. Eaton.
"The market has also become significantly more competitive than we
expected earlier in the year. While the general economy and consumer
confidence continue to look good, increased competition and softer sales have
forced us to increase incentives and step up our ongoing efforts to eliminate
waste and reduce expenses.
"We've taken prudent steps by initiating a temporary freeze on outside
hiring, reducing overtime and travel and delaying some discretionary capital
spending projects.
"Our momentum appears to be re-building -- we had our best June ever for
light truck sales. Looking ahead, we're very enthusiastic about the new
products that we will launch in the third quarter including the Dodge Durango,
Chrysler Concorde and Dodge Intrepid.
"And Chrysler's accomplishments continue to be recognized. Standard &
Poor's, Fitch Investors Service and Duff & Phelps recently upgraded Chrysler's
long-term debt rating from "A-" to "A". In addition, the J.D. Power 1997
Initial Quality Study showed a 20 percent improvement for Chrysler over the
1996 study. These are critical measures and they're all moving in the right
direction," Eaton said.
Other second-quarter results include:
* Total revenues were $14.4 billion for second-quarter 1997, compared to
second-quarter 1996 total revenues of $15.8 billion.
* Net earnings as a percent of total revenues decreased to 3.4 percent in
second-quarter 1997, compared with 6.5 percent in second-quarter 1996.
* Chrysler's worldwide factory shipments in second-quarter 1997 were
738,453 units, compared to 801,769 units during the same period for
1996.
* Chrysler's combined U.S. and Canadian retail (including fleet) sales of
cars and trucks in second-quarter 1997 were 702,210 units, compared to
773,017 units for the same period in 1996.
* Chrysler's combined U.S. and Canadian retail (including fleet) car and
truck market share for second-quarter 1997 was 15.5 percent, compared
with 16.7 percent in second-quarter 1996.
* International retail sales in the second quarter of 1997 were 60,575
vehicles, up 16 percent over second-quarter 1996 sales of 52,220
vehicles. In Europe, Chrysler sold 29,165 vehicles in second-quarter
1997, an increase of 16 percent over 25,173 vehicles in second-quarter
1996. In Latin America, Chrysler sold 11,612 vehicles in second-
quarter 1997, an increase of 185 percent over 4,077 vehicles in second-
quarter 1996.
* Chrysler continued its common stock buyback as part of its plan to
repurchase $2 billion of common stock in 1997, subject to market and
general economic conditions. During the second quarter and first six
months of 1997, Chrysler purchased $410 million and $997 million,
respectively, of its common stock. Through June 30, 1997, the Company
had purchased $4.1 billion of common stock in a buyback plan that
started in 1995.
* Chrysler Financial Corporation (CFC) reported second-quarter 1997
pretax earnings of $156 million and second-quarter 1997 net earnings of
$103 million -- CFC's highest quarterly earnings ever. Second-quarter
1996 pretax earnings were $155 million, and second-quarter 1996 net
earnings were $101 million.
2nd Qtr '97 2nd Qtr '96 1st Qtr '97
Total Revenues (Billions) $14.4 $15.8 $16.1
Pretax Earnings (Millions) $811 $1,720 $1,704
Net Earnings (Millions) $483 $1,037 $1,029
Net Earnings per
Common Share (EPS)
Primary $0.70 $1.39 $1.46
Fully Diluted $0.70 $1.38 $1.45
Dividends Declared
per Common Share $0.40 $0.35 $0.40
Worldwide Factory Shipments 738,453 801,769 781,239
Retail (including fleet) Unit Sales
U.S. and Canada Combined 702,210 773,017 626,844
Car, Truck Market Share
U.S. and Canada Combined 15.5% 16.7% 15.6%
Average U.S. Retail
Incentives per Vehicle $980 $625 $705
Cash, Cash Equivalents,
and Marketable Securities
at End of Period (Millions)
Consolidated $8,035 $8,762 $8,663
Automotive $7,040 $7,543 $7,624
Shares Used to Calculate
EPS (Millions)
Primary 685.7 747.7 705.9
Fully Diluted 689.0 753.0 708.4
Shares of Common Stock
Outstanding at End of
Period (Millions) 674.5 728.6 687.9
SOURCE Chrysler Corporation