Chrysler Earnings Soar on Increased US Auto Sales

Chrysler, one of the big three US auto manufactures, reported first quarter earnings four times the level of last year as US retail sales increased 40%. Net income was $473 million in the first quarter of 2012 compared to $116 million a year earlier, the Auburn Hills, Michigan-based company reported today. Chrysler's US market share increased to 11.2% from 9.2% a year ago. It was the quarterly market leader in Canada with 15% of auto sales. Worldwide vehicle sales increased by one third, to 523,000. Vehicle sales outside of North America rose 80% from a year earlier to 67,000. “Another positive quarter—built on sales gains that have surpassed the industry average – is affirmation that the Chrysler team is maintaining its focus,” Chairman and chief Executive Officer Sergio Marchionne said in the press release. “We continue to deliver on the targets in our five-year plan and are now focused on successfully launching the Dodge Dart.” U.S. dealer supply was 59 days at the end of the quarter, compared to 64 days at the end of 2011 and 67 days a year earlier. Fiat took over bankrupt Chrysler in 2009 as part of a bailout deal with the US government. In May 2011 Chrysler announced that it paid back the entirety of bailouts received from the US and Canadian government – six years ahead of schedule. The company paid back the loans with corporate financing received in the private market. Taxpayer profit from the loans was estimated to be about $1.8 billion. “Paying back the loans, along with the financial community's investment in our refinancing packages, marks another step in the Company returning as a competitive force in the global automotive industry,” Marchionne said at the time. For fiscal year 2012 Chrysler expects to report a net income of about $1.5 billion on a net revenue of approximately $65 billion. The auto manufacture plans to ship 2.3 to 2.4 million vehicles worldwide. In the first quarter it shipped 607,000 vehicles worldwide. Fellow big three auto manufacturer Ford

will report earnings on Friday, and analysts are not expecting good news of the level Chrysler reported. The average of seven analysts surveyed by Bloomberg shows net income may have decreased to 48% to $1.34 billion for the Detroit, Michigan-based company. Profit may have declined from 62 cents per share last year to 36 cents per share, if analysts predictions hold true. General Motors

will report earnings May 3, and the company is also expected to see a decline in earnings. Analysts surveyed by Thomson Reuters expect first-quarter operating profit of $1.38 billion, or 85 cents per share, down from $2 billion, or 95 cents per share, a year earlier.