Chrysler Group posted a 65-percent drop in net profit in the first quarter of 2013 to $166 million from $473 million in the same period in 2012. In a statement, Chrysler said that it posted a 6-percent drop in first-quarter revenues to $15.4 billion as global shipments slid to 574,000 in the first three months of 2013 from 607,000 in the same period in 2012, mainly due to the termination of Jeep Liberty production.
According to the carmaker, profits suffered due to costs related to the launches of the re-engineered Ram pickup line and the Jeep Grand Cherokee. The carmaker expects to post a net income of around $2.2 billion in the full year 2013, in line with earlier forecasts.
Chrysler reiterated its previous forecast of delivering around 2.65 million vehicles this year. The carmaker said that at the end of its quarter, it had $11.9 billion in cash on hand, reflecting a $600-million increase from the $11.3 billion at the end of the quarter a year ago.
Chrysler chief executive Sergio Marchionne earlier warned that the carmaker's first quarter profits would be hit by the launches of two of its most profitable products, the Ram and the Jeep Grand Cherokee. He said that Chrysler could still achieve its year-end projections, but to do so means a "flawless execution" for the remainder of 2013. Marchionne remarked that while he knew that Chrysler’s net profit would decline in the first quarter of 2013, he did not expect the drop to be that drastic.
Chrysler’s gross industrial debt dropped to $12.5 billion in the first quarter 2013, down slightly from the $12.6 billion posted in the same period in 2012. Marchionne disclosed that the first saleable 2014 Cherokees won't go into production until "sometime in the middle of June," adding that it would be a slow ramp-up through November. Marchionne spoke about European austerity measures and the high relative value of the euro.