Chrysler's quarterly net profit rises 80% to $381 million
DETROIT -- Chrysler Group's third-quarter net profit rose 80 percent to $381 million on strong sales of cars and light trucks in North America.
The company earned $212 million a year earlier as its North American sales of cars and light trucks were rising amid what is now a string of 30 consecutive months of year-over-year sales gains.
Revenue rose 18 percent to $15.5 billion during the latest period as Chrysler's worldwide vehicle sales climbed 12 percent to 556,000, the company said in a statement on Monday.
"We continue to work feverishly and are pleased to see that our all-consuming aspiration for excellence is translating into results," Chrysler CEO Sergio Marchionne said in the statement. The company affirmed its earnings guidance of $1.5 billion for the year, and said it anticipated generating free cash flow in excess of $1 billion.
In 2011, Chrysler earned $183 million, its first annual net profit since it emerged from bankruptcy in 2009.
For the first nine months of 2012, Chrysler posted $1.3 billion in net profits, two and a half times the $509 million it earned for the same period of 2011. Chrysler ended the third quarter with $11.9 billion in cash, down from the $12.1 billion it had at the end of June. The company is preparing several major product launches expected to occur in 2013 and 2014.
The company recorded a modified operating profit of $706 million, or 4.6 percent of revenue, for the third quarter, up 46 percent from $483 million reported for the same period of 2011.
More sales, better pricing
For the first nine months of 2012, Chrysler's modified operating profit was $2.2 billion, up 50 percent from the first nine months of 2011. The automaker said the rise was due in part to increased sales volumes and pricing, partially offset by a mix that favored less profitable passenger car sales instead of pickups and SUVs.
For the first nine months of 2012, Chrysler's worldwide vehicle shipments totaled 1.8 million vehicles, up 22 percent from the same period a year ago and on-track to meet the company's goal of 2.4 million shipments by year end. Those were both traditional sales as well as sales of vehicles that Chrysler makes for other manufacturers, including corporate parent Fiat.
Through September, Chrysler recorded 30 consecutive months of year-over-year sales gains in the United States. During the third quarter, the company said it posted a 13 percent increase in total U.S. sales and a 16 percent increase in U.S. retail sales. Chrysler's U.S. market share for the third quarter was 11.3 percent, down 0.1 percentage points from the same period of 2011.
Truecar.com analyst Jesse Toprak said Chrysler's performance in the United States stands in contrast to domestic rivals Ford and GM.
"Even though Chrysler's market share is stagnant, that's a good number. Both Ford and GM have lost almost two full percentage points," to recovering Japanese automakers, Toprak said, but not Chrysler. He said Chrysler's sales are up the most of any domestic automaker so far this year, and that they are simultaneously spending less money on incentives and selling their vehicles at higher transaction prices.
"These are all numbers going in the right direction," Toprak said.
In October, the automaker began delivering the first re-engineered Ram 1500 pickups to dealerships around the United States. The pickup has a new powertrain that features an available Chrysler 3.6-liter Pentastar V-6 engine and an 8-speed automatic transmission, which boosts fuel economy to 18 mpg city/25 mpg highway.
This week, Chrysler added a third shift of workers to its Jefferson North Assembly plant in Detroit to increase production of the popular Jeep Grand Cherokee.
Italian automaker Fiat, which owns 58.5 percent of Chrysler, is expected to release its earnings on Tuesday. Marchionne said he plans to use the occasion to announce adjustments in Fiat's production and financial plans as the Italian automaker deals with the ongoing crisis in Europe.
Through September, Chrysler's strong earnings in North America accounted for all of Fiat's profits.
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