In the third quarter of this year, Chrysler Group posted a net profit of $212 million as it was aided by the arrival of new models and higher sales. In comparison, it had a net loss of $84 million the previous year. Its revenue increased by 19 percent to $13.1 billion, boosted by the demand for 16 new or refreshed vehicles intended for the 2011 and 2012 model years.
In addition, Chrysler raised its earnings outlook. It now anticipates achieving an adjusted net income of $600 million for the entire 2011. This is a marked increase from its former estimates of $200 million to $500 million.
Chrysler, which is the smallest automaker in Detroit, recorded $42 million in losses on revenue of $40 billion for the period from January to September 2011. Chrysler is on course to becoming profitable once again since 2005.
It has only been two years since it entered bankruptcy and was rescued by Fiat S.p.A. Furthermore, Chrysler said that its cash flow for this year will go as high as $1.2 billion. It had previously estimated a figure of $1 billion.
At the end of the third quarter, Chrysler had $9.5 billion in cash, lower from $10.2 billion recorded when the second quarter ended. However, this is higher by $1.2 billion compared to the previous year.
For the first nine months of 2011, Chrysler posted $39.9 billion in net revenues, which is much higher than the $31.2 billion in net revenues it posted in the same period in 2010. Despite the net profit posted in the third quarter of 2011, the carmaker still posted a net loss in the first three quarters of the year.
For the January to September 2011 period, Chrysler logged $42 million in net loss. Nonetheless, this financial performance is much better than in the same period in 2010, when the carmaker record $453 million in net loss. As of September 30, 2011, Chrysler had $37.3 billion in total assets. This compares to $35.5 billion as of December 31, 2010.
The earnings results were announced just one day after the UAW narrowly ratified a new four-year labor deal with the company.
In a statement, CEO Sergio Marchionne said that Chrysler Group was able to stay with the plan it laid out in November 2009 that its sales will increase and it will get positive financial results.
On July 21, 2011, Fiat acquired the stake in the Chrysler held by the United States Department of the Treasury and the Canadian Government. Fiat now owns a majority of the membership interests in the Chrysler, with the remaining equity owned by the VEBA Trust.