March 7, 2021

Chrysler Posts a Loss, but Operating Income Improves

The company, which is majority owned by the Italian automaker Fiat, reported a loss for the quarter of $370 million, mostly because of a $551 million one-time charge to fully repay loans from the United States and Canadian governments.

Without the charge, Chrysler said it would have posted net income of $181 million in the second quarter; it had a net loss of $172 million in the period a year earlier.

The automaker also reported a 30 percent increase in revenue, to $13.7 billion, from the second quarter of 2010, the latest sign that its comeback from bankruptcy in 2009 is accelerating.

Chrysler, the smallest of the three Detroit car companies, said that new products including the Jeep Grand Cherokee helped it increase its share of the American market and sell 19 percent more vehicles in the second quarter than in the period a year earlier.

“There is no doubt that Chrysler Group has taken a huge step forward this quarter,” Sergio Marchionne, chief executive of both Chrysler and Fiat, said in a statement. Fiat owns 53 percent of the Detroit automaker.

Mr. Marchionne said Chrysler’s resurgence should gain momentum now that the government loans had been repaid and heavy interest payments had been shed.

“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 in the global automotive landscape,” Mr. Marchionne said.

Chrysler is on track to achieve full-year revenue of $55 billion and earn $200 million to $500 million, excluding charges, he said.

The earnings were the first reported by the company since Fiat took a majority ownership stake by purchasing stock previously held by the American and Canadian governments.

Going forward, Chrysler and Fiat will consolidate their financial results and further meld their management teams. Mr. Marchionne is expected to appoint senior executives this week to oversee engineering, purchasing and other areas for both automakers, as well as regional chiefs for the combined companies.

Article source:

Speak Your Mind