Chrysler Group and Fiat CEO Sergio Marchionne told analysts last month that he anticipated Chrysler would post an operating profit in the second quarter of 2010. Sure enough, the company did rake in a $183 million operating profit, but the company still lost $172 million overall in the same time frame.
Still, that’s a baby step in the right direction. The $172 million loss is smaller than the $197 million hit Chrysler took in the first quarter of 2010, and even the $183 million operating profit is an increase of roughly $40 million.
“The second quarter operating profit confirms that Chrysler Group is on track to achieve its goals,” Marchionne said in a prepared statement, “yet an extraordinary amount of work still lies ahead. Customer traffic in our dealerships and confidence in the company’s future continues to grow with the launch of the all-new 2011 Jeep Grand Cherokee, one of the signature vehicles for Chrysler Group.”
For the first half of the 2010 fiscal year, the Chrysler Group lost $369 million, putting the company right on track to lose less than $1 billion over the course of the entire year — roughly what Marchionne predicted back in the first quarter of 2010. Other positive signs? Chrysler ended the second quarter with net revenues of $10.5 billion, up from $9.7 billion in the first quarter, and a total positive cash flow of $474 million, bringing the company’s total cash reserves to $7.8 billion. Additionally, sales reversed from the first-quarter falter to a year-to-year increase, allowing Chrysler to slowly grow its market share from 9.1 percent to 9.4 percent
Slow growth? Perhaps, but that’s just what Marchionne expected from the automaker, saying 2010 is “a year of translation and stabilization.” Several new products, including the refreshed Dodge Charger, Chrysler 300, a new Dodge SUV/ crossover, a replacement for the Chrysler Sebring, and the Fiat 500, may help bolster sales at Chrysler, but as its CEO notes, the company “must continue to be rigorous, disciplined, and focused on the task at hand” in order to transform small steps into sustainable growth.