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Chrysler Group Reports $690 Million Q1 Loss

Charges due to acquisition of VEBA shares put maker in red.

by on May.12, 2014

While the company posted a loss due to special charges, Chrysler's net revenue increased, in part, because of strong sales of the Jeep Cherokee.

Chrysler Group LLC today reported a net loss of $690 million for the quarter, due to special charges related to Fiat SpA’s acquisition the ownership stake in Chrysler held by the United Auto Workers VEBA.

Net revenue was $19 billion for the quarter, up 23% from $15.4 billion in the prior-year period, primarily driven by an increase in vehicle shipments, including Ram pickup trucks and the all-new Jeep Cherokee.

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Chrysler’s modified operating profit during the first quarter was $586 million, or 3.1% of net revenue, compared with the $435 million reported in the year-ago period. The 35% increase was primarily due to higher shipments and improved mix, which was partially offset by increased vehicle costs due to vehicle content enhancements; higher advertising costs; higher depreciation and amortization costs due to new product launches; and foreign exchange effects. (more…)

Chrysler Won’t Return to “Old Days of Sin,” Insists CEO Marchionne

Global realignment coming, no big-buck payouts planned for top managers.

by on Jul.26, 2011

Sergio Marchionne hints he'll likely remain CEO of Chrysler after the upcoming management realignment.

Gone are the “days of sin,” when cash was seen as the answer to everything at Chrysler, said CEO Sergio Marchionne, as he answered questions about the maker’s second-quarter loss and dodged others looking at the planned global consolidation of Chrysler and its Italian partner Fiat.

In a wide-ranging discussion, Marchionne made it clear his goal is to “extract value” from the combined Chrysler-Fiat organization by making them work more closely together.  But he cautioned that he does “not want to screw up” Chrysler’s nascent revival – something that could readily happen if it lost focus on what it does best.

Marchionne downplayed concerns about Chrysler’s $181 million second-quarter loss – noting the maker went into the red because of a $551 million charge related to the recent payoff of its federal bailout loans.  (Click Here for more on Chrysler’s earnings.)

“I think we have made great progress,” said the Canadian-educated executive.  “We feel we are on target.”

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In the coming days, Marchionne confirmed he will announce a global realignment that will consolidate key positions in the Chrysler/Fiat alliance, eliminating the current redundancy and creating a more streamlined enterprise that is “ultimately the best way to extract value” for shareholders.  While he declined to provide specifics, the CEO suggested that the move “should show benefits quickly.”

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Ford Profits Dip During Q2

Like Chrysler, Ford hit by one-time charges.

by on Jul.26, 2011

One-time charges, including the cost of abandoning the Mercury brand, hit Ford's bottom line.

Ford Motor Co. reported a slight drop in earnings for the second quarter as special, one-time charges – including the abandonment of the Mercury brand — hit the company’s earnings sheet.

Nevertheless, Ford still posted net income of $2.4 billion, or 59 cents per share, an 8% year-over-year decline of $201 million, or 2 cents per share, from second quarter 2010.  But the maker also posted a healthy 13% increase in revenues.

Without the one-time write-offs, Ford would have earned $2.9 billion, or 65 cents a share – slightly ahead of the consensus analyst forecast of 60 cents.

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It was notably the ninth consecutive quarterly profit by Ford, the only domestic automaker to avoid filing for bankruptcy protection during the auto industry’s deep downturn in 2009.  Chrysler, which also reported its second-quarter numbers today, said it went $370 million into the red as the result of one-time charges connected to the payoff of its government bailout loans.  (Click Here for more on Chrysler.)

“We delivered very good second quarter results while growing the business globally and serving more customers in every region,” said Alan Mulally, Ford president and CEO. “Despite an uncertain business environment, we further strengthened our balance sheet and continued to invest for the future.”

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Chrysler Q2 Bottom Line Hammered by Debt Repayment Costs

Maker would have been $181 million in the black.

by on Jul.26, 2011

Marchionne sees a silver lining despite the second-quarter loss at Chrysler.

Chrysler reports it lost $370 million for the second quarter of 2011, a sharp setback from its first-quarter profit – but the maker notes it would have been solidly in the black but for the cost of paying off its government loans.

With net revenues of $13.7 billion, an increase of 30%, the maker says earnings for the April – June quarter would have reached $181 million without the finance charges.   Chrysler earned $116 million during the January to March quarter of this year, its first profit since emerging from Chapter 11 protection in June 2009.

Chrysler’s loss was announced at the same time Ford Motor Co. revealed its second-quarter earnings declined slightly to $2.4 billion.  (Click Here for more on Ford.) Chrysler CEO Sergio Marchionne is meanwhile expecting to announce a sweeping global realignment, this week, that will further consolidate the U.S. maker and its Italian ally Fiat.

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On May 24, Chrysler finished repaying the $7.5 billion in loans it owed to the U.S. and Canadian governments as part of its 2009 bailout. (For the full story, Click Here.) Refinancing the remaining debt resulted in a one-time charge of $551 million during the second quarter.  Adjusting for that and other factors, Chrysler claimed a modified operating profit of $507 million, compared with $183 million for the second quarter of 2010.

So, despite the red ink, Marchionne sounded a bullish note about the latest results, declaring, “There is no doubt that Chrysler Group has taken a huge step forward this quarter.

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Chrysler Reduces Net Loss, Posts Operating Profit for Q4

Declaring turnaround firmly underway, maker plans bonuses for both hourly and salaried workers.

by on Jan.31, 2011

"It would have been inexcusable" not to reward workers, said CEO Sergio Marchionne.

Showing further signs of a comeback from its 2009 bankruptcy, Chrysler significantly narrowed its net loss for the fourth quarter of 2010 while posting an operating profit for the final three months of the year.

The maker, meanwhile, said it expects to have its bottom line firmly back in the black for all of 2011 – with projected earnings of somewhere between $200 million and $500 million.  Strong earnings will be essential for the maker’s plan to stage an initial public offering sometime during the second half of the year.

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The good news will be shared with company workers, CEO Sergio Marchionne alerting workers in a company-wide e-mail that both salaried and hourly staff will receive “performance award payments.”

“I want to express my gratitude to everyone for their hard work,” said the chief executive’s note.  “You are the authors of this success.  I want to thank you for your dedication, your creativity and your willingness to embrace change without which these results would not have been achieved.”

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Chrysler Reports $84 Mil Net Loss

But results exceed original forecast.

by on Nov.08, 2010

The Fiat 500 will begin rolling into U.S. showrooms by December.

Chrysler Group LLC reported an $84 million net loss for the third quarter of 2010, the only one of the domestic makers to go into the red during the July-September period.

But the maker’s results nonetheless exceeded expectations announced a year ago, in the months after Chrysler emerged from Chapter 11 protection.  And company officials are now projecting an operating profit of $700 million for the full year, up from an earlier outlook of $200 million.

The third-quarter results followed less than a week after Chrysler announced a 37% upturn in October sales, its seventh monthly increase in a row, and the biggest gain of any of the domestic Big Three. (October sales, Click Here.)

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Chrysler said its revenues for the third quarter totaled $11.02 billion, a 5.2% gain.  Excluding the cost of servicing the loans it has received from the U.S. Treasury as part of its 2009 bailout, Chrysler said it would have had a $239 million operating profit for the third quarter.

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