Chrysler Group disclosed that its net income for the first quarter quadrupled from $116 million in the same period last year to $473 million. The automaker has set a profit goal of $1.5 billion for the year. Revenue increased 25% to $16.4 billion while U.S. automobile sales rose 39%. CEO Sergio Marchionne commented that the positive quarter is attributed to sales gains that exceed the industry average.
This positive outcome is "affirmation" that the Chrysler team is "maintaining its focus," he added. Marchionne emphasized that they will continue to deliver on the targets in line with their five-year plan. The $1.5 billion target in the net income for 2012 would far outperform the $183 million which the automaker achieved in 2011 as it reported its first annual profit since its 2009 bankruptcy.
The recent earnings announcement of Chrysler comes after disclosures that the company will allow its operating agreement with Ally Financial Inc. to expire in a year. The company is in discussions with other banks for automobile financing. The interest expense on Chrysler's debt during the first quarter dropped 20% from a year earlier to $277 million. At the end of the quarter, the automaker had $12.6 billion in debt.
Chrysler confidentially refinanced the debts it owed from its bankruptcy exit to the Canadian, U.S. and Ontario provincial governments in May 2011. In the 12-month period beginning March 31, 2011, the automaker's total liabilities fell $700 million. The company stated that its global automobile shipments for the quarter hit 607,000 units, up 25% from the 485,000 units shipped during the same period last year.
The automaker's goal for the year is 2.4 million units. Global automobile sales rose 33% in the quarter to 523,000 units. The discrepancy of the shipped units to the sold units is primarily due to the automobiles that the company builds for other carmakers such as parent company Fiat S.p.A.