Chrysler Group announced today that it lost $690 million in the first quarter of 2014, despite revenue of $19 billion. The loss is mostly due to "infrequent items;" Chrysler says that without those charges, it would have posted a $486 million profit last quarter. In the first quarter of 2013, Chrysler posted a $473 million profit.
Last quarter, Chrysler spent $504 million paying down debt from the United Auto Workers' Retiree Medical Benefits trust (UAW VEBA), and another $672 million as part of an agreement with the UAW to continue several of Chrysler's engine manufacturing programs. Without those $1.2 billion charges, Chrysler would have been profitable last quarter.
That said, the news wasn't all bad. Chrysler Group first-quarter sales totaled 668,000 units globally last quarter, up from 574,000 in the first quarter of 2013; and the company said its U.S. market share rose from 11.4 percent in Q1 2013 to 12.5 percent. For the full financial year 2014, Chrysler said it expects to make $2.3-$2.5 billion in profit.
Within the U.S. market, Chrysler saw the proportion of its sales going to fleets decline by five percentage points year-over-year, to 23 percent, although its days supply (a measure of how many cars are unsold at dealerships) rose to 71 days.
Chrysler also attributed a decline in its modified operating profit, which was $586 million, to the high costs of launching several new vehicles, increased advertising costs for those vehicles, and the impacts of higher foreign exchange rates -- notably costs incurred in South America due to the devaluation of Venezuelan currency.