Chrysler reports $166 million 1Q profit

Chrysler profit falls 65 percent on lower shipments and launch costs of key vehicles

Published On: Apr 29 2013 08:40:39 AM EDT   Updated On: Apr 29 2013 09:00:24 AM EDT
AUBURN HILLS, Mich. -

Chrysler Group LLC on Monday reported its preliminary 2013 first-quarter results, including net income of $166 million on revenue of $15.4 billion.

As anticipated, the quarter was negatively affected by the reduced vehicle shipments that resulted from key product launches, namely the 2013 Ram Heavy Duty trucks and the 2014 Jeep Grand Cherokee, as well as preparation for the second-quarter production launch of the all-new 2014 Jeep Cherokee. These actions are expected to position the company for a strong performance in the second half of 2013. The first-quarter results mark the company’s seventh consecutive quarter of positive net income, reflecting continued improvements in product acceptance, pricing discipline, and market share.

“We remain on track to achieve our business targets, even as the first-quarter results were affected by an aggressive product launch schedule,” said Chrysler Group LLC Chairman and CEO Sergio Marchionne. “This quarter underscores the importance of an unwavering commitment to execute flawless vehicle introductions to reach our full potential. While the task ahead this year is daunting, we remain committed to our overall targets, including a minimum shipment increase of 8 percent and a Modified Operating Profit of $3.8 billion.”

Revenue for the quarter was down 6 percent from $16.4 billion in the first quarter of 2012. The anticipated reduction was primarily attributable to lower shipments in the quarter due to the end of Jeep Liberty production in 2012 in preparation for the all-new 2014 Jeep Cherokee production launch in the second quarter, and the ongoing launches of the new 2014 Jeep Grand Cherokee and 2013 Ram Heavy Duty trucks. In addition, international shipments declined year-over-year due to continued economic weakness in Europe and import restrictions in Latin America.

Modified Operating Profit was $435 million, or 2.8 percent of revenue, in the first quarter, versus $740 million reported in the prior year. The decrease was attributable to reduced shipments, industrial costs related to the new vehicle launches, and a foreign currency exchange loss related to the February 2013 devaluation of the Venezuelan bolivar fuerte relative to the U.S. dollar, partially offset by continued favorable net pricing in North America.

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