Chrysler Earns $225 Million in Q4 2011, Posts First Full-Year Profit since '05

A strong fourth-quarter finish in 2011 allowed the Chrysler Group to announce this morning it posted a $183 million net profit for the 2011 fiscal year.

Net revenue in the fourth quarter of 2011 grew 41 percent year-to-year to $15.1 billion, but the $424 million increase in income - $225 million versus a $191 million loss in Q4 2010 - is perhaps most important. Much of that growth is attributed to strong vehicle sales worldwide - Chrysler says global vehicle sales in the fourth quarter of 2011 grew 28 percent to 479,000 units, while its U.S. market share grew to 10.8 percent.

This marks Chrysler's third profitable quarter in 2011, although those quarters weren't consecutive. That record was marred by the automaker's second quarter, where it restructured its financing and paid off some $6.7 billion in loans issued by the United States government. The move led Chrysler to post a $370 million loss in the third quarter, but also allowed the company the chance to curtail its interest payments and increase Fiat's ownership of the company.

Looking at the entire year, Chrysler's net revenue was close to $55 billion, while its net income totaled $183 million. That's a far cry from the 2010 fiscal year, which saw the automaker bleed nearly $652 million. It's also the first full-year profit posted by the automaker since 2005.

"I think we're pleased with the results, and we're pleased with Chrysler," Fiat/Chrysler CEO Sergio Marchionne said during a conference call held this morning. "We've delivered everything we promised and told you about in 2009. The house is in good shape; we're financially strong now and in an incredibly strong position for 2012. I'm delighted with the progress we've made."

Predictably, Chrysler's attention now turns to the current fiscal year. Though sales have kicked off to a strong start, Marchionne notes 2012 "won't be a walk in the park." The automaker will certainly face higher structure and investment costs as it both increases advertising and gears up to launch several new products for the 2012 and 2013 model years, including the 2012 Fiat 500 Abarth, the 2013 Dodge Dart, a revised 2013 Ram pickup, and the 2013 SRT Viper.

Another goal is to increase the profitability from Fiat's side of the partnership. When asked how much of the Fiat Group's 2011 profit was based on Chrysler's performance, Marchionne tersely responded with "all of it," and expressed his desire to see the situation change quickly. If it doesn't, Marchionne noted, the partnership is no better than "a bad marriage."

"2012 is clearly a transition year for us," he said. "We're juggling with costs and product updates, but we think we have things in place. The real story is going to unfold in 2013, when you'll be able to see the work applied by our people to create a product lineup that can truly compete globally."

Something that's not likely in the cards for 2012 is a buyout of the 41.5 percent of Chrysler presently owned by the United Auto Worker's VEBA health care trust.  Although Marchionne noted he assumes the VEBA's goal is to ultimately exit ownership of Chrysler (while maximizing their exit), he doesn't expect this to occur this year. Discussion may emerge in the second half of 2012, he noted, but the purchase isn't expected to be complete until 2015.

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