DETROIT — Chrysler, the Detroit automaker, said on Monday that it had an operating profit for a third consecutive quarter, but not enough to put the company into the black over all as it paid hundreds of millions of dollars in interest on government loans. þþThe company said it lost $84 million in the third quarter, less than half as much as it lost the previous period and the closest it has come to making money since its short trip through bankruptcy in early 2009. þþHaving shed much of its liabilities and slimmed down its operations in the reorganization, Chrysler’s biggest burden is interest payments to the American and Canadian governments, which it owes $7.4 billion. Chrysler has paid $899 million in interest this year, including $308 million in the third quarter, resulting in an overall loss of $453 million from January through September. þþBefore interest and taxes, the company said it earned $239 million in the quarter, bringing its operating profit for the year to $565 million. It also forecast an operating profit of about $135 million in the fourth quarter and $700 million for all of 2010, up from break-even to a $200 million gain. þþThe chief executive, Sergio Marchionne, said Chrysler had been running ahead of its financial targets. þþ“Our 2010 accomplishments are just the beginning of building Chrysler Group into a vibrant and competitive automaker,” Mr. Marchionne said in a statement. þþEven though Chrysler emerged from bankruptcy a month sooner than General Motors, its turnaround has progressed more slowly, largely because its vehicle lineup had less to offer. Chrysler also kept more of its government loans on its balance sheet as debt, whereas most of the money G.M. borrowed was converted into an equity stake held by the Treasury Department. þþThe Treasury owns 61 percent of G.M. but only 8 percent of Chrysler. G.M. already has repaid its outstanding loans to the government, whereas Chrysler has said only that it would do so by 2014. þþG.M. is preparing to have a public stock offering next week, but Chrysler is still about a year away from going public. þþG.M., which earned $2.2 billion in the first half of 2010, is scheduled to report its third-quarter results on Wednesday. G.M. said last week that it expected a third-quarter profit of about $2 billion. þþChrysler still has considerable work to do in revamping its selection of cars and trucks, but it has shown significantly more promise under the control of the Italian automaker Fiat than in the years before its bankruptcy, when it was owned by a private equity firm that spent little on product development. Fiat owns 20 percent of Chrysler, and Mr. Marchionne serves as chief executive of both companies. þþChrysler’s sales in the United States are up 16.5 percent in 2010 through October, compared with a 10.6 percent gain across the auto industry. Its market share rose to 9.5 percent, from 9 percent a year ago. þþSales of the redesigned Jeep Grand Cherokee, a model whose success is critical to the company, nearly quadrupled last month in the United States. Chrysler is working to overhaul more of its models to make them more competitive, but that process takes years. þþWithin the next few months, 165 specially selected Chrysler dealers across the country will begin selling the tiny, fuel-efficient Fiat 500 car. þþ“We are committed to ensuring that every new vehicle this company launches has the same high quality and technological advances as the Jeep Grand Cherokee,” Mr. Marchionne said. þþThe Grand Cherokee helped Chrysler cut its net loss by more than half from the second quarter to the third and increase revenues 5.2 percent, to $11 billion. þþChrysler generated $31.2 billion of revenue in the first nine months of 2010 and on Monday predicted that revenue in the fourth quarter would be roughly the same as in the third quarter. þþChrysler now expects cash flow to be $500 million positive for the full year, rather than $1 billion negative as it had forecast previously. þþThe company said it had $8.3 billion in its cash reserves as of Sept. 30, up from $7.8 billion on June 30. The gain was primarily related to a $400 million loan from Mexican development banks to help finance production of the Fiat 500 at a plant in Mexico. þþChrysler started the year with $5.8 billion in cash. þþThe company did not release quarterly results in 2009 but did reveal that it lost $3.8 billion between its emergence from bankruptcy in June and the end of the year. þþ
Source: NY Times
