Chrysler Group today reported net income of $507 million for the second quarter of 2013, an increase of $71 million compared to the second quarter of last year. The profit was based on total second-quarter revenue of $18.0 billion, up from $16.8 billion at the same time last year.
Although the positive result represents the eighth consecutive quarter in which Chrysler Group has posted a profit, the news wasn’t as good as it could have been. Chrysler CEO Sergio Marchionne said that the company will post better profits later in the year, once it has paid off certain expenses.
“Chrysler Group is poised for a very strong performance in the second half of the year,” he said in a statement. “The timing of product launches and capacity increases causes this year’s performance to be biased to the second half.”
One of those major expenses was the $151 million recall of certain Jeep models over concerns their fuel tanks could crack, leak, and start a fire. Chrysler Group is also spending heavily on the launch of new vehicles, primarily the 2014 Jeep Cherokee.
In the second quarter, Chrysler Group reported global sales of 643,000 units, up 10 percent year-over-year. The U.S. market beat that figure, with sales hear last quarter growing 17 percent compared to the second quarter of 2012. The share of new cars going to fleets (for instance rental-car companies) also declined from 27 percent last year to 22 percent in the second quarter of this year. That’s one of the lowest fleet mixes that Chrysler Group has posted in the U.S. during the past three years.
In spite of the positive results this quarter, Chrysler Group has revised its full-year predictions downward. The company originally predicted annual net income of $2.2 billion, but now says that figure will be somewhere in the range of $1.7 to $2.2 billion.