Chrysler posted a net loss of $370 million in the second quarter

Article by Christian A., on July 25, 2011

Chrysler Group LLC, in the second quarter, recorded a net loss of $370 million due to costs associated with the repayment of government bailout loans. Specifically, the company incurred a charge of $551 million for its repayment of the Canadian and the U.S. Department of Treasury loans that kept the vehicle manufacturer afloat in 2009.

The company’s "modified" operating profit for the second quarter almost tripled to $507 million from the same period last year, while revenue increased 30 percent to $13.7 billion, the company has disclosed. Thanks to a big advertising push as well as new vehicle models, the company’s global sales in the second quarter increased to 486,000 units or 19 percent.

Cash reserves increased $300 million to $10.2 billion during the past three months. CEO Sergio Marchionne stated that there is no doubt that the company has made a huge leap forward this quarter.

He added that refinancing the debt and repaying the government loans six years early strengthen their conviction that they are on the right path to reestablishing the company and restoring it to its rightful position on the international automotive industry.

Three months ago, the company recorded its first post-bankruptcy profit. Specifically, the company posted a $116 million net profit, the first since exiting a U.S.-steered bankruptcy under Italy's Fiat S.p.A. Company achievements in the second quarter included the May 24 repayment of $1.7 billion to Canada and $5.9 billion to the U.S. government, which are six years in advance of the original schedule.

Also, the company has refinanced its debt with a $3.0 billion senior secured loan, a $1.3 billion revolving line of credit, and $3.2 billion in secured notes. Moreover, global shipments increased 19 percent to 514,000 vehicle units, marking the first time that figure had topped 500,000 units in a quarter since the company exited bankruptcy in 2009.

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