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Chrysler Group Trims Loss to $172 Million in Q2

Italian-controlled company once again promises 2010 breakeven or better numbers. IPO still coming in 2011.

by on Aug.09, 2010

Chrysler CEO Sergio Marchionne, center, UAW President Bob King, right, and UAW Vice President General Holiefield, left, applaud U.S. President Barack Obama during a visit on July 30, 2010.

Chrysler Group LLC today said that Q2 net revenues increased to $10.5 billion, an 8.2% improvement over the prior quarter. First half 2010 net revenues totaled $20.2 billion.

As a result the company ended Q2 2010 with an operating profit of $183 million and a first half 2010 operating profit of $326 million.

However, Q2 resulted in a net loss of $172 million, down slightly from a loss of $197 million in Q1.

Analysts had projected an operating profit of $400 million. And achieving profitability is crucial to plans to taking the company public some time in 2011.

In the 14 months since Chrysler emerged from bankruptcy it has only had one major product launch, the Jeep Grand Cherokee, which just went into production at the end of May. The changeover cost the company $64 million in revenue, not including tooling and other plant costs. Moreover Chrysler is carrying enormous interest costs from outstanding taxpayer loans. Payments of $296 million in Q2 accounted for nearly all of the swing between the operating profit and the net loss.

Chrysler marketshare remained at 9.4% in the United States and down slightly to 12.9% in Canada, its two primary markets as it has almost no presence overseas.

Sergio Marchionne, Chief Executive Officer, Chrysler Group said, “an extraordinary amount of work still lies ahead,”