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Chrysler reports $198 million in modified operating profit, $199 million loss for quarter

by Bill Cawthon on

Chrysler Group released its preliminary fourth-quarter financials this morning. The company’s net revenues in the quarter were down slightly to $10.8 billion because of lower unit sales: total revenue for the year was $41.9 billion. Modified operating profit was $198 million making a total operating profit of $763 million, which is ahead of guidance. The net loss in the fourth quarter was $199 million raising the net loss for 2010 to $652 million.

Chrysler CEO Sergio Marchionne said, “As Chrysler Group’s brand displays at the Detroit auto show confirmed, the Company has lived up to its promise to launch 16 all-new or significantly refreshed vehicles in the past 12 months. All of these vehicles bear testimony to Chrysler’s rebirth. Given the positive comments we have received to date, it can safely be said that what Chrysler delivered last year, on both the product and financial fronts, surpassed many expectations.”

However, our job is not yet done,” Marchionne added. “We have a lot of work ahead to fulfill our five-year business plan objectives.”

In the fourth quarter, EBITDA was $882 million, or 8.2% of net revenues. EBITDA for 2010 was $3.461 billion. The company had $7.3 billion in cash at the end of the quarter, raising total liquidity to $9.6 billion. The company’s cash position was impacted by costs associated with new product launches. Free cash flow was $1.4 billion in 2010. U.S. market share rose to 9.2 percent compared to 8.8 percent in 2009.

For 2011, Chrysler looks for net revenue to increase to approximately $55 billion with a net income of $200 million to $500 million and a positive free cash flow of $1 billion. Operating profit should be in the range of $2 billion with EBITDA of $4.8 billion.

Chrysler sold 1,515,999 vehicles worldwide in 2010, just barely exceeding the 1.5 million CEO Sergio Marchionne says the company needs to break even. However, Chrysler still hasn’t been able to report a net profit, including accounting for loan payments, and this could create problems for Marchionne’s efforts to refinance the company’s government loans, some of which carry interest rates of more than 20 percent.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.


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