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.
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.