Chrysler Reports Record Q2 Earnings
13 July 1998
Chrysler Reports Record Second-Quarter Earnings Per Share And Record Half-Year Results
AUBURN HILLS, Mich., July 13 -- Chrysler Corporation
today reported earnings for the second quarter and first half of
1998 that reflected numerous records.
Second-quarter 1998 net earnings were $1.003 billion, or $1.55 per common
share ($1.51 per diluted common share), compared with second-quarter 1997 net
earnings of $483 million, or $0.71 per common share ($0.70 per diluted common
share). Second-quarter 1998 results were Chrysler's highest second-quarter
earnings per share ever and second-highest net earnings for any second
quarter.
Pretax earnings for the second quarter of 1998 were $1.602 billion
compared with $811 million for the second quarter of 1997, which included an
estimated unfavorable impact of approximately $730 million pretax ($438
million after taxes) related to a 29-day strike. Second-quarter 1998 pretax
earnings were Chrysler's second-highest for any second quarter.
Net earnings for the first six months of 1998 were $2.055 billion, or
$3.18 per common share ($3.12 per diluted common share), compared with $1.512
billion, or $2.20 per common share ($2.17 per diluted common share), for the
first six months of 1997. Net earnings and earnings per common share for the
first half of 1998 were Chrysler's highest half-year results ever. Pretax
earnings for the first half of 1998 were $3.274 billion, Chrysler's second-
highest half-year ever, compared with $2.515 billion for the first six months
of 1997.
"We are very pleased with our results for the second-quarter," said
Chrysler Chairman Robert J. Eaton. "The competitive environment got tougher
in the quarter, heightened by an aggressive coupon incentive battle, but
breakthrough products helped us considerably.
"In fact, we just announced that our U.S. sales for June, the second
quarter and the first half were all-time sales records for their respective
periods," said Eaton. "Clearly these records indicate how strong the market
was the first half of the year and how popular our products are with
consumers. A highlight of the quarter was seeing the Chrysler Concorde and
Cirrus take top honors in their segments in the recent J.D. Power Initial
Quality Survey.
"And the outlook for the U.S. automotive industry remains favorable --
consumer confidence continues to be high while unemployment and inflation
remain low," he said. "However, with economic growth slowing down and the
remaining uncertainty in Asia, we will continue to watch the market closely.
"We are especially proud of our employees this quarter, who have worked
hard to make this success possible," said Eaton. "When we announced the
pending business combination with Daimler-Benz, they were asked to maintain
focus and continue efforts to lower operating costs and improve quality; they
did all those things and more."
Other second-quarter and first-half results include:
-- Total revenues were $17.0 billion for second-quarter 1998 -- Chrysler's
highest second-quarter and second-highest for any quarter. Second-quarter
1997 total revenues were $14.4 billion. Total revenues for the first half of
1998 were $33.8 billion, Chrysler's highest half-year for total revenue,
compared to first-half 1997 total revenues of $30.5 billion.
-- Net earnings as a percent of total revenues increased to 5.9 percent in
second-quarter 1998, compared with 3.4 percent in second-quarter 1997.
-- Chrysler's worldwide factory shipments in second-quarter 1998 were
849,369 units, compared to 738,453 units during the same period for 1997.
Worldwide factory shipments in the first half of 1998 were 1,675,089 units,
Chrysler's second-highest half-year for shipments, compared to 1,519,692 units
during the same period for 1997.
-- Chrysler's combined U.S. and Canadian retail (including fleet) sales of
cars and trucks in second-quarter 1998 were 802,572 units, compared to 702,210
units for the same period in 1997.
-- Chrysler's combined U.S. and Canadian retail (including fleet) car and
truck market share for second-quarter 1998 was 16.1 percent, compared with
15.5 percent in second-quarter 1997.
-- International retail sales in the second quarter of 1998 were 53,342
vehicles, down 12 percent from second-quarter 1997 sales of 60,576 vehicles.
-- With the combined impact of Chrysler's outstanding performance and the
suspension of the Company's share repurchase program due to the pending
merger, at $9.2 billion, automotive cash levels are at an all-time record.
-- Chrysler Financial Corporation (CFC) reported second-quarter 1998 net
earnings of $120 million, an all-time quarterly net earnings record. CFC also
reported second-quarter 1998 pretax earnings of $178 million, the highest
quarterly pretax earnings in the Company's history. Second-quarter 1997 net
earnings were $103 million, and second-quarter 1997 pretax earnings were $156
million. For the first six months of 1998, CFC net earnings were $228
million, a CFC half-year net earnings record. CFC pretax earnings for the
first six months of 1998 were $338 million, CFC's second-highest half-year
ever. Net and pretax earnings for the first half of 1997 were $196 million
and $297 million, respectively.
2nd Q '98 2nd Q '97 6 Mos. '98 6 Mos. '97
Total Revenues
(Billions) $17.0 $14.4 $33.8 $30.5
Pretax Earnings
(Millions) $1,602 $811 $3,274 $2,515
Net Earnings
(Millions) $1,003 $483 $2,055 $1,512
Net Earnings per
Common Share (EPS)
Basic $1.55 $0.71* $3.18 $2.20*
Diluted $1.51 $0.70* $3.12 $2.17*
Dividends Declared per
Common Share $0.40 $0.40 $0.80 $0.80
Worldwide Factory
Shipments 849,369 738,453 1,675,089 1,519,692
Retail Unit
(incl. fleet) Sales
U.S. and Canada
Combined 802,572 702,210 1,444,661 1,329,054
Car, Truck Market Share
U.S. and Canada
Combined 16.1% 15.5% 16.2% 15.6%
Average U.S. Retail
Incentives per Vehicle $1,485 $980 $1,375 $855
Cash, Cash Equivalents,
and Marketable Securities
at End of Period (Millions)
Consolidated -- -- $10,389 $8,035
Automotive -- -- $9,244 $7,040
Shares Used to Calculate
EPS (Millions)
Basic 646.3 678.9* 646.2 688.3*
Diluted 662.9 688.1* 659.6 698.3*
Shares of Common Stock
Outstanding at End
of Period (Millions) -- -- 646.7 674.5
* Second-quarter 1997 and six-months 1997 have been restated to reflect
the adoption of Statement of Financial Accounting Standards (SFAS) No. 128
"Earnings per Share." SFAS No. 128 replaced the presentation of primary EPS
and fully diluted EPS with a presentation of basic EPS and diluted EPS,
respectively. Basic EPS excludes potential share dilution and is computed
based on the weighted-average number of common shares outstanding for
the period; diluted EPS reflects the potential dilution of securities that
could share in the earnings. The adoption of this new accounting standard did
not have a material effect on Chrysler's reported EPS amounts.