Chrysler reports first quarterly net profit since 2009 - Business - Autos

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A Chrysler Group assembly worker works on the bottom chassis for Chrysler Jeeps, Grand Cherokees and Dodge Durangos at the Chrysler Jefferson North auto plant in Detroit, Michigan April 28, 2011. REUTERS/Rebecca Cook

Reuters

updated 2 minutes ago 2011-05-02T17:13:31

By Deepa Seetharaman

DETROIT (Reuters) - Chrysler Group LLC reported its first quarterly net profit since emerging from bankruptcy nearly two years ago, helped by a revamped lineup of cars and trucks as well as higher vehicle prices.

Chrysler’s first-quarter net income came to $116 million, compared with a net loss of $197 million a year earlier, as revenue shot up 35 percent to $13.1 billion.

The company reported an operating profit of $477 million in the first quarter, compared with $143 million a year earlier.

Sixty percent of the company’s sales in the first quarter came from its revamped lineup, including the Jeep Grand Cherokee. Average vehicle prices rose to $28,300 in the first quarter, from $27,300 a year ago.

Until now, Chrysler has posted a string of operating profits, but high interest costs on more than $7 billion in loans the company owes to the United States and Canada from its 2009 bailout have undercut its ability to post a net profit.

Chrysler’s earnings kick off a week of big news for the automotive sector. Carmakers are due to report April U.S. auto sales on Tuesday, and General Motors Co will release quarterly earnings on Thursday.

Chrysler, which now operates under the management of Italian automaker Fiat SpA, is seeking a $3.5 billion term loan and $2.5 billion in bonds to refinance that debt, the company said on Monday.

Sergio Marchionne, the chief executive of Chrysler and Fiat, said the deal was close to being “crystallized.”

Chrysler also reiterated its full-year outlook, saying it aimed to post revenue of $55 billion and net income between $200 million and $500 million.

Marchionne has said the company would need to post “a couple” quarters of net income before an initial public offering, which could come this year or next.

“Success is incredibly temporary,” Marchionne told analysts and reporters on a conference call. “The first quarter is done. We’ve got a lot of quarters to do.”

Fiat shares rose to the highest level in more than three months after the Chrysler report. Read the rest of this article here.