Chrysler Group comeback story: Net Income more than quadraples in Q1 2012

Just three years ago,Chrysler Group was down and bankrupt. Their financial condition was at a stage where they were begging for a bailout. But now, Chrysler Group first quarter profits have increase fourfold from $116 million Q1 2011 to $473 million during Q1 2012. A major reason for this is the fact that Chrysler Group revamped models and increased their market share from 9.2% to 11.2% in the US.

International sales of Chrysler Group was up 80% while net industrial debt was down to $1.3 billion as compared to $3.4 billion that it was last year. Net revenue for the first three months of the year was at $16.4 billion a rise of 25% over what they stood during the same period in the previous year. Shipments during Jan-March 2012 were at 607,000 and this figure was 485,000 during the same three months of 2011.

Now what could be the reason for these spectacular results, is it the strong volume, competitive pricing, inclusion of new vehicle content,  state of the art engineering capabilities, enhanced R&D for new models or a concerted effort being put in to market their products?  We think it was a mix of all the above that has made the company see such astounding success.

Press Release

Chrysler Group First-Quarter 2012 Net Income More Than Quadrupled to $473 Million
Chrysler Group First-Quarter Modified Operating Profit Increased 55 Percent to $740 Million with Free Cash Flow of $1.7 Billion

• Chrysler Group net income in the first quarter of 2012 more than quadrupled to $473 million
• Net revenue for the quarter was $16.4 billion, up 25 percent from $13.1 billion a year ago
• Modified Operating Profit(a) grew to $740 million for the first quarter, 55 percent higher than a year earlier
• Free Cash Flow(d) for the first quarter totaled $1.7 billion; Cash(c) ended the quarter at $11.3 billion compared with $9.9 billion a year ago and $9.6 billion at Dec. 31, 2011
• Net Industrial Debt(e) was reduced to $1.3 billion at March 31, 2012, from $3.4 billion a year ago and $2.9 billion at Dec. 31, 2011
• Worldwide vehicle shipments were 607,000 in the quarter, up 25 percent from 485,000 a year ago
• Worldwide vehicle sales for the first quarter totaled 523,000, up 33 percent from a year ago
• U.S. market share increased to 11.2 percent for the first quarter, up from 9.2 percent a year ago, driven primarily by a 40 percent increase in U.S. retail sales. For the first time in its history, Chrysler was the quarterly market leader in Canada with a share of 15.0 percent
• Chrysler Group achieved its third and final Class B performance event in January 2012 by committing to produce the fuel-efficient Dodge Dart, increasing Fiat S.p.A.’s ownership interest to 58.5 percent

April 26, 2012 , Auburn Hills, Mich. – Chrysler Group LLC today reported preliminary net income of $473 million for the first quarter of 2012, up more than 300 percent from $116 million a year ago, driven primarily by its 40 percent increase in U.S. retail sales.

“Another positive quarter – built on sales gains that have surpassed the industry average – is affirmation that the Chrysler team is maintaining its focus,” said Sergio Marchionne, Chairman and Chief Executive Officer of Chrysler Group LLC. “We continue to deliver on the targets in our five-year plan and are now focused on successfully launching the Dodge Dart, a car that is a true melding of Chrysler’s and Fiat’s engineering and styling strengths.”

Revenue for the quarter was $16.4 billion, up 25 percent from $13.1 billion in the first quarter of 2011, driven by a 25 percent period-over-period increase in shipments and positive pricing.

The Company reported a Modified Operating Profit of $740 million, or 4.5 percent of revenue, in the first quarter, up 55 percent from the $477 million reported in the prior year. The increase was attributable to strong volume and pricing, partially offset by unfavorable mix, higher industrial costs, including new vehicle content enhancements and engineering, research and development for new models, and continued marketing efforts.