Chrysler Quadruples Quarterly Profit
AUBURN HILLS -- (WWJ) Boosted by strong sales and a much better debt picture, Chrysler is posting its best quarterly profit in 13 years. The company earning $473 million in the first quarter.
"Another positive quarter – built on sales gains that have surpassed the industry average – is affirmation that the Chrysler team is maintaining its focus," said Sergio Marchionne, Chairman and Chief Executive Officer of Chrysler Group LLC. "We continue to deliver on the targets in our five-year plan and are now focused on successfully launching the Dodge Dart, a car that is a true melding of Chrysler's and Fiat's engineering and styling strengths."
The profit is four times what Chrysler made in the first quarter last year. It's also better than Chrysler's entire 2011 profit. But that number was pushed down by the costs of paying off the company's high interest rate government loans.
But the lower interest rates from new loans saved Chrysler $71 million in the first quarter, adding to the profits.
The bulk of the earnings come from an improved product lineup that has boosted Chrysler sales 25 percent.
"The things that have come out since, basically, the Grand Cherokee have been extremely strong, very impressive, very competitive," says Dave Sullivan, an analyst with AutoPacific. "The quality seems to be there. The perceived quality is there."
Sullivan says the new products are resonating in the marketplace.
"They are hitting all the right things. They've got the technology. They've got great fuel economy. I really have not seen a weakness in any of the new products they are introducing."
The last time Chrysler posted profits this strong, in 1998, it was fueled by the SUV boom.
The one gap in Chrysler's product lineup will be filled early this summer, when the Dodge Dart compact hits the marketplace.
Chrysler says it expects to earn $1.5 billion for all of 2012.
Chrysler CEO Sergio Marchionne will celebrate the strong profit news later this afternoon, as he take former Polish President Lech Walesa on a tour of the company's Jefferson North plant in Detroit. Walesa was honored in Chicago yesterday, at a Jeep sponsored event featuring Nobel prize winners.
On Monday, Chrysler is expected to announce that it will move several executives into the Dime Building in downtown Detroit. The company isn't commenting on Detroit News reports that CEO Sergio Marchionne will have an office in that building.
Marchionne has been a strong booster of the city of Detroit, and is heading this year's United Way campaign.
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