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Chrysler posts first profit since emerging from bankruptcy

May 02, 2011|Reuters
  • A Dodge Durango is assembled at Chrysler's Jefferson North Assembly Plant in Detroit. Chrysler Group reported its first quarterly profit since emerging from bankruptcy nearly two years ago, helped by a revamped lineup of cars and trucks.
A Dodge Durango is assembled at Chrysler's Jefferson North Assembly… (Carlos Osorio, Associated…)

Chrysler Group reported its first quarterly profit since emerging from bankruptcy nearly two years ago, helped by a revamped lineup of cars and trucks as well as higher vehicle prices.

Chrysler's first-quarter net income came to $116 million, compared with a loss of $197 million a year earlier, as revenue shot up 35% to $13.1 billion.

The Auburn Hills, Mich., company reported an operating profit of $477 million in the first quarter, compared with $143 million a year earlier.

Chrysler said 60% of its sales in the first quarter came from its revamped lineup, including the Jeep Grand Cherokee. Average vehicle prices rose to $28,300 in the first quarter from $27,300 a year earlier.

Until now, Chrysler has posted a string of operating profits, but high interest costs on more than $7 billion in loans the company owes to the U.S. and Canada from its 2009 bailout have undercut its ability to post a net profit.

Chrysler's earnings kick off a week of big news for the automotive sector. Carmakers are due to report April auto sales Tuesday and General Motors Co. will release quarterly earnings Thursday.

Chrysler, which operates under the management of Italian automaker Fiat, is seeking a $3.5-billion term loan and $2.5 billion in bonds to refinance that debt, the company said Monday.

Sergio Marchionne, chief executive of Chrysler and Fiat, said the deal was close to being "crystallized."

Chrysler also reiterated its full-year outlook, saying it aimed to post revenue of $55 billion and net income of $200 million to $500 million.

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