Chrysler Group posted its second straight operating profit, says Marchionne

Article by Christian Andrei, on August 29, 2010

As Chrysler Group proceeds to recover from its bankruptcy in 2009, it posted its second straight operating profit. CEO Sergio Marchionne made this announcement in a call with analysts however he declined to provide specifics about how much Chrysler earned.

The figures are set to be announced on August 9. In the first quarter, Chrysler recorded earnings of $143 million on an operating basis as it benefited from cost cuts made during its US-steered bankruptcy and its emergence under the control of Italy's Fiat S.p.A.

Chrysler's first-quarter net loss of $197 million followed a $2.69 billion loss in the final three months of last year.

Marchionne made these comments about Chrysler's performance after Fiat reported a return to a second-quarter profit on higher sales of trucks and agricultural machines.

Fiat revealed that it's possible that it would raise its full-year forecast. In a statement, Fiat's second-quarter net income was posted at 90 million euros ($116 million), compared with a 168 million-euro loss a year ago.

Trading profit, or earnings before interest, taxes and one-time gains or losses, more than doubled to 651 million euros, exceeding the 359 million-euro average estimate made by 11 analysts approached by Bloomberg.

After governments ended their scrappage programs, sales slowed in Europe but this was offset by a recovery in demand for the company's Iveco trucks and New Holland tractors.

Marchionne, who also serves as Fiat's CEO, is suspending the release of new models this year as the auto industry has yet to fully emerge from the global financial crisis.

Philippe Houchois, an analyst at UBS AG in London, said that Chrysler's numbers are very good. Houchois has a neutral rating on the stock. He added that the boost likely comes from the light commercial vehicles (like the Fiat Ducato) which can be very profitable.

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