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Chrysler announces profits, loans

by David Zatz on

Chrysler achieved its first quarterly net income, of $116 million, since its creation in June 2009. The first-quarter net income compares to a net loss of $197 million in the first quarter of 2010.

Sergio Marchionne said, “Chrysler Group’s improved sales and financial performance in the first quarter show that our rejuvenated product lineup is gaining momentum in the marketplace and resonating with customers. These results are a testament to the hard work and dedication of our employees, suppliers and dealers, all of whom are helping Chrysler create a new corporate culture built on the quality of our products and processes, and simple, sound management principles.”

Chrysler also announced details on its refinancing of government loans, with senior secured credit expected to reach $3.5 billion in a six-year loan and a $1.5 billion in five-year revolving credit; and an expected $2.5 billion in new secured debt with eight and ten year maturities. This money will be used to pay all government loans and related fees and expenses. The debt offering is to take place at the same time that Fiat spends $1.3 billion to buy another 16% interest in Chrysler.

The $2.5 billion in long term debt cannot be sold within the United States.

Financial details

Net revenues for the first quarter of 2011 were $13,124 million, far higher than Q1 2010’s $3,437 million. Modified operating profit was $477 million, versus $334 milion. Cash on hand is now a more comfortable $9.9 billion, far higher than Q1 2010’s $2.5 billion; an additional $2.3 billion is still available to be borrowed from the US and Canadian governments.

Worldwide vehicle sales increased 18% from Q1 2010; market share in the US rose to 9.2% (from 9.1%) while Canadian share rose to 14.7% (from 13.7%).

Interest expenses for the first quarter of 2011 were $348 million, with the US government presumably being the primary beneficiary.

Inventory is currently at 67 days.

Chrysler issued guidance for 2011 as a whole, with net revenues projected to be above $55 billion; a modified operating profit of $2 billion or more; a net income of $200-$500 million; and free cash flow of over $1 billion. A conference call will be held at 10 am Eastern time to discuss the results.


Worldwide vehicle sales rose 18% to 394,000. The Japanese supply disruption is expected to result in between 50,000 and 100,000 vehicles not being built during the year, in quarters 2 and 3; by quarter 4, it is expected to be resolved.

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