Chrysler posts Q2 profit jump, cuts 2013 outlook

Chrysler Group on Tuesday posted a double-digit profit jump for the second quarter, boosted largely by US vehicle sales, but lowered its 2013 outlook. Net income totaled $507 million in the April-June period, a 16 percent increase from $436 million a year earlier. Net revenues climbed 7 percent from a year ago to $17.99 billion. Global vehicle sales came in at 643,000 for the second quarter, up 10 percent from a year ago and driven by a 17 percent jump in US retail sales. Chrysler reported modified operating profit of $808 million, down from $755 in the 2012 second quarter. The decline in part reflected a $151 million charge for the safety recall of several models of Jeeps. "Chrysler Group is poised for a very strong performance in the second half of the year, with the new Jeep Grand Cherokee and Ram 1500 pickup earning best-in-class recognition, and the all-new Jeep Cherokee now rolling off the line," Chrysler Group chairman and chief executive Sergio Marchionne said in a statement. Chrysler lowered its forecasts for 2013, penciling in net income between $1.7 and $2.2 billion, compared with a previous estimate of $2.2 billion. It also revised downward its expected modified operating profit to a range between $3.3 and $3.8 billion, from $3.8 billion. "Chrysler posted modest results. While the numbers showed some progress, they also indicate that the company is not a viable competitor to its much larger rivals," said Douglas McIntyre of 24/7 Wall St. "Unfortunately, Chrysler has a very modest line-up of cars when Jeep is factored out. Its sales are built almost entirely around its 200, 300 and Town & Country products. These are not enough for it to grapple with manufacturers that have two or three times that many models," McIntyre said. Chrysler CEO Marchionne also heads Italian automaker Fiat, which on Tuesday reported an 82 percent in second-quarter earnings to 435 million euros ($577 million) driven entirely by Chrysler. Excluding the Chrysler accounts, Fiat posted a net loss of 247 million euros, about the same amount as in the 2012 second quarter. Fiat took control of Chrysler in 2009 after it emerged from a US court-supervised bankruptcy reorganization. The Italian automaker gained a majority stake in June 2011; the two groups operate separately.