By on May 2, 2011

Chrysler’s Q1 conference call is just beginning, and though you can’t listen in unless you’re registered media, you can download the slide set here [PDF] and the press release here. Besides, I’ll be updating this post with the latest as it happens, so why bother? Marchionne is just noting that Chrysler’s $116m Q1 profit is the first since 2009, although he seems more excited about “modified operating profit” of $477m, and free cash flow of other $2.526b.

Chrysler says it is managing the Japanese supply issue in concert with Fiat, and Marchionne says it is “getting better all the time.” Chrysler estimates its losses as follows:

Potential loss  of volume in 2011:  50‐100k  vehicles for the year (25‐50k  vehicles in Q2; 25‐50k  vehicles in Q3)

On the other hand, Chrysler’s inventories are building steadily (“in preparation for the Spring selling season”) so, undersupply isn’t really an issue anyway. Analyst questions seem focused on the difference between sales and shipments, increasing inventories and the possible impacts on working capital. Marchionne is getting testy, arguing that he has “fewer than 2 Chrysler 200s per dealer,” and saying “let the machine run.”

And Sergio Marchionne has just made my day, confirming that the “40 MPG car” that will give Fiat its final stake in Chrysler is in fact a “40 MPG combined unadjusted” car. This is the first time that Chrysler has ever confirmed what TTAC’s research first showed, namely that the “irrevocable ecological commitment” represented by this forthcoming small car (interestingly, Sergio says it will be “homologated,” indicating that it may not a wholly new product) was negotiated using the old CAFE-style method.

Possibly the biggest news here: Chrysler has whooped its fleet mix into shape for the quarter, bringing it from 44% to 31%. Incentives are flat, but transaction prices are up. Not bad at all.

Marchionne is back, and joking about forcing his CFO to read what he always terms the “propaganda slides,” which highlight the successes of newly-launched product. Moving to soon-to-be-launched products, Marchionne tried to get enthusiastic about the Fiat 500 “Gucci Edition” but seems more excited about getting the Pentastar V6 into more of Chrysler’s products. Marchionne confirms that the Fiat Freemont (a rebadged Dodge Journey) will be sold abroad. The Lancia Flavia (Chrysler 200), on the other hand, is still being referred to as a concept, though Marchionne says (without much enthusiasm) that it “should” move towards production, “especially on the convertible side.”

Chrysler is confirming guidance for the full year, with operating profits projected at $2b+ and profit of $200m-$500m. This includes an expected $400m or so adjustment between the face and carrying value of some of Chrysler’s debt which will be incurred when that debt is restructured. Gas prices has not had a significant impact on mix, Chrysler says, although the company admits “weakness in our portfolio.” Marchionne admits that the Fiat launch is “behind schedule.”

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7 Comments on “Chrysler Reports $116m Q1 Profit...”

  • avatar

    Some numbers from the press release: Cash reserves are now $9.9 billion, with the US Treasury and Canadian government loans the total cash available is $12.1 billion. Which means Chrysler is finally back to where it was in cash reserves before Daimler ingested it. Chrysler paid $348 million in interest payments for its government loans in the quarter (of course the government spent this faster than the time it took me to do grocery shopping this weekend).

  • avatar
    Educator(of teachers)Dan

    Not bad, let’s see where this goes. At least the patient seems to be showing signs of improvement.

  • avatar
    Rod Panhard

    There’s just one problem though. Consumers are worried about gas prices, and Chrysler’s “strength” is in it’s gashogs. As a fallback position, they’re hoping they can dieselize their gashogs for export.

    • 0 avatar
      Educator(of teachers)Dan

      gashog is a relative term. A 2011 Chrysler 200 (V6) is supposed to get 29mpg highway. That’s not a class leader, but it’s not bad (pretty close to a Camry actually.) A 2011 Chrysler 300 with the V6 gets 27mpg highway, again not bad. If you buy the V8 yeah it’s a bit of a hog, but then if you buy the HEMI you likely don’t give a crap what the fuel economy is. If you took a time machine back to 1985, grabbed the owner of a 318V8 Lean Burn Fifth Avenue owner and described Chrysler selling a car like the 2011 300 (fuel economy, size, the hp from the V6) they’d have told you that you were full of $hit.

      Are Chrysler’s trucks gashogs? Heck yes. But then Ford is really the only one who can claim to sell a halfway efficient truck.

      • 0 avatar

        Don’t forget the Grand Caravan/Town and Country which by themselves don’t get stellar mileage, but when compared to the Odyssey, Sienna, Quest and Sedona, it’s pretty much a wash.

  • avatar

    “with operating profits projected at $2b+ and profit of $200m-$500m”

    I’m confused on the use of the term operating profits – Do you mean income (turnover)?

  • avatar

    That’s good news. A reborn Chrysler means more jobs for auto mechanics and transmission rebuild shops.

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