(GM) Chrysler Reports First Profit in Five Years

Chrysler Group LLC, 25% owned by Italy’s Fiat SpA (FIATY), posted a profit of $116 million in the first quarter of 2011 compared with a net loss of $197 million in the year-ago quarter. Operating profit, excluding taxes, interest and pension-related costs, more than tripled to $477 million from $143 million a year earlier. The higher profit was attributable to higher sales and better pricing and mix.

This is the first quarterly profit reported by the company since 2006. The company has emerged from bankruptcy protection a little less than two years ago.

Revenue surged 35% to $13.1 billion, driven by sales of latest models. Sales of the revamped Jeep Grand Cherokee SUV shot up 64% while that of the newly launched Chrysler 200 sedan more than quadrupled over those of its predecessor, the Sebring during the quarter.

Global deliveries in the quarter rose 18% to 393,879 vehicles from the year ago level. The average price paid per vehicle increased $1,000 to $28,300.

The automaker’s cash balance stood at $9.9 billion as of March 31, 2011, up from $2.5 billion as of December 31, 2010.

Chrysler expects to earn between $200 million and $500 million in 2011, which would help the company hold an initial public offering (IPO) later this year or early next year. It also expects to save $100 million in the second half of 2011 due to its debt refinancing and incur charges of about $500 million associated with paying off the loans early.

Chrysler is the third Detroit automaker after General Motors Co. (GM) and Ford Motor Co. (F) to report a profit after the global economic crisis. General Motors has already reported four profitable quarters while Ford recorded its eighth consecutive quarterly profit last week.

Ford posted a profit of $2.61 billion or 62 cents per share during the first quarter that was the best since the same quarter in 1998. Its profit rose from $1.76 billion or 46 cents per share in the first quarter of 2010. General Motors will release its first quarter results this week.

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