Chrysler Reports $116m Q1 Profit

Edward Niedermeyer
by Edward Niedermeyer

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.”

Join the conversation
2 of 7 comments
  • Colin42 Colin42 on May 02, 2011

    "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)?

  • Cheezeweggie Cheezeweggie on May 03, 2011

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

  • Jdt65724922 How can a Chrysler E-Class ride better than a Chrysler Fifth Avenue?
  • Lorenzo This series is epic, but I now fear you'll never get to the gigantic Falcon/Dart/Nova comparison.
  • Chris P Bacon Ford and GM have decided that if you can't beat 'em, join 'em. Odds are Chrysler/Cerberus/FCA/Stellantis is next to join in. If any of the companies like Electrify America had been even close to Tesla in reliability, we wouldn't be here.
  • Inside Looking Out China will decide which EV charging protocol will become world wide standard.
  • Chris P Bacon I see no reference to Sweden or South Carolina. I hate to assume, but is this thing built in China? I can't help but wonder if EVs would be more affordable to the masses if they weren't all stuffed full of horsepower most drivers will never use. How much could the price be reduced if it had, say, 200hp. Combined with the instant torque of an EV, that really is plenty of power for the daily commuter, which is what this vehicle really is.