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Chrysler: operating profit, net loss

by Bill Cawthon on

Chrysler Group LLC had an operating profit of $507 million on net revenues of $13.7 billion in the second quarter of 2011, up 177% from the same period last year, when the figures were $183 million on revenues of $10.5 billion.

There was a net loss of $370 million compared to a loss of $172 million in 2010, but the 2011 figure includes a charge of $551 million to repay debt, including the U.S. and Canadian government loans.

Earnings before interest, taxes, deductions and amortization (EBITDA) were $1.3 billion, up substantially from $855 million in 2010. Cash at June 30, 2011, was $10.2 billion, up $0.3 billion from March 31, 2011, and free cash flow was $174 million down from $491 million in Q2 2010.

Worldwide vehicle sales in the second quarter increased 19 percent to 486,000 units. U.S. market share grew a full point, to 10.6 percent from 9.4 percent in Q2 2010; Canadian market share increased two points, to 14.9 percent from 12.9 percent in Q2 2010

The targets for the full year were confirmed. The company is looking for net revenues exceeding $55 billion with a modified operating profit of more than $2 billion and EBITDA greater than $4.8 billion. Adjusted net income is seen at $0.2 – $0.5 billion (excluding the $551 million Q2 charge for debt payments) with free cash flow of less than $1 billion.

In its release, Chrysler announced continued improvement in its operating and financial performance.

In Q2 2011, net revenues increased 30 percent to $13.7 billion compared to Q2 2010. The increase was primarily due to increased volumes and positive pricing and mix attributable to the 16 all-new or significantly refreshed products in the marketplace. First half (H1) 2011 net revenues totaled $26.8 billion, up 33 percent from H1 2010.

sergio marchionne
The Company posted a modified operating profit of $507 million in Q2 2011 (3.7 percent of net revenues) compared to $183 million (1.7 percent of net revenues) in Q2 2010. The Q2 2011 improved operating performance was primarily attributable to increased volumes, positive pricing and mix, partially offset by increased advertising expenditures and industrial costs, including depreciation and amortization.

In the first half of 2011, modified operating profit was $984 million, three times higher than the first six months of 2010.

Chrysler CEO Sergio Marchionne said, “There is no doubt that Chrysler Group has taken a huge step forward this quarter. Refinancing our debt and repaying our government loans six years early, reinforces our conviction that we are on the right path to rebuilding this company and restoring it to its rightful place on the global automotive landscape.

“We are changing both the image and substance of our company in order to regain the faith of consumers. There is no substitute for hard work and we are committed to continuing to deliver on the business plan numbers we outlined.”

Note: The eagerly anticipated announcement of the new executive structure was not included in the Chrysler figures. If they are announced today, they will come with the Fiat second-quarter statements to be released later today. At the time of this posting, the Fiat board was meeting in Betim, Brazil, to approve the figures.

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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