Chrysler posts $436 million in 2nd-quarter profits on U.S. sales gains
Revenue advances 23% to $16.8 billion
Editor's note: An earlier version of this story gave the wrong month for a cash comparison. Chrysler had $11.3 billion in cash at the end of March.
DETROIT -- Chrysler Group today posted a second-quarter net profit of $436 million on strong sales of cars and light trucks. The company lost $370 million in the second-quarter of 2011, when it booked a $551 million charge to pay off its U.S. government loans.
Revenue rose 23 percent to $16.80 billion during the latest period as Chrysler's worldwide vehicle sales climbed 20 percent to 582,000, the company said in a statement today.
"Our results reflect a tireless pursuit by the people of Chrysler Group to deliver the very best quality and value across our brands," Chrysler-Fiat CEO Sergio Marchionne said in a statement.
After posting first-quarter net income of $473 million, Chrysler said that it was well on its way to meeting an annual profit target this year of at least $1.5 billion. In 2011, Chrysler earned $183 million, its first annual net profit since it emerged from bankruptcy in 2009.
The company said it produced modified operating profits of $755 million, or 4.5 percent of revenue, in the second quarter, an increase of 49 percent over the year-earlier period.
Chrysler said the gain in modified operating profits reflected strong sales volume and pricing. Those developments were partially offset by unfavorable mix as the company increased deliveries of cars versus trucks and SUVs, enhanced vehicle content and increased r&d outlays.
Chrysler said it ended the second quarter with $12.1 billion in cash, up from $11.3 billion at the end of March.
With no captive finance arm to boost revenues, Chrysler's profits rely more heavily on sales of its vehicles than rival automakers. But demand for Chrysler's lineup has remained strong in 2012, both in the United States and elsewhere.
The automaker's reliance on the U.S. market for the bulk of its sales has also shielded it from the economic woes in Europe.
Chrysler sold 1.23 million vehicles in the first six months of the year, more than half of the 2.4 million goal it has set for 2012. Those sales include both traditional sales as well as vehicles that Chrysler makes for other manufacturers, including corporate parent Fiat S.p.A.
In the second quarter, Chrysler benefited from a 32-percent increase in U.S. retail sales. Chrysler said its total U.S. sales rose 24 percent in the second quarter.
The first 2013 Dodge Dart's have begun arriving at Chrysler dealerships. The Dart is based on the Alfa Romeo Giulietta, and is the first Chrysler vehicle built on a Fiat platform. It is also Chrysler's first entry in the crowded compact sedan category since the Neon ended production in 2005.
This fall, a re-engineered Ram 1500 pickup -- the automaker's highest-selling vehicle -- will arrive in dealer showrooms, as will a redesigned and more powerful Viper, now under the SRT brand.
Chrysler is set to record its 28th consecutive month of year-over-year U.S. sales gains when it reports July sales on Wednesday.
The company's U.S. car and light truck sales are up 30 percent to 834,068 through June.
But Detroit's smallest automaker is running up against capacity constraints in several key plants. This month, Chrysler added a third crew of about 1,100 workers at its Belvidere Assembly Plant in Illinois, where the Dart is built alongside the Jeep Compass and Patriot.
Company officials said they were accelerating into November plans to add a third crew at its Jefferson North Assembly Plant in Detroit, where the popular Jeep Grand Cherokee and Dodge Durango are built.
Reid Bigland, head of U.S. sales, said the automaker was also looking at expanding production and jobs in the plants in Toledo, Ohio, and Warren, Mich., where the Jeep Wrangler and Ram pickups are built.
On July 3, Fiat filed notices telling investors that it intended to exercise its option to acquire another 3.3 percent of Chrysler Group from the trust that oversees retiree medical benefits for UAW members, known as the UAW VEBA. Before the announcement, Fiat owned 58.5 percent of Chrysler, while VEBA owned the remaining 41.5 percent. Fiat has not announced whether the transaction has cleared.
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