Nov 5, 2014 11:25 AM
Chrysler 3Q earnings up 32 pct. on rising sales
The Associated Press
DETROIT (AP) Chrysler Group LLC's third-quarter net profit rose 32 percent as worldwide sales continued to climb, helping the U.S. company prop up its ailing parent.
Chrysler made $611 million in the July-through-September quarter, compared with $464 million a year ago. Revenue rose nearly 18 percent to $20.7 billion.
Fiat and Chrysler last month finished a five-year merger process to form Fiat Chrysler Automobiles. The Netherlands-based parent company made only $221 million last quarter under International accounting standards, which are different from those applied in the U.S.
Chrysler said Wednesday its worldwide sales grew 18 percent in the quarter to 711,000 vehicles. Most of the increase occurred in the U.S., where retail sales grew 20 percent largely because of the new Jeep Cherokee small SUV and Chrysler 200 sedan.
Chrysler's U.S. market share also continued to grow during the quarter, rising 1.1 percentage points to 12.3 percent. Outside North America, sales rose 11 percent to 91,000.
The Auburn Hills, Michigan, company raised its full-year forecast for worldwide vehicle shipments by 100,000 vehicles. It now expects to ship about 2.9 million cars and trucks. It expects revenue of more than $80 billion for the year.
On a conference call with analysts, Chief Financial Officer Richard Palmer said the company's sales growth and new products selling for higher prices should help close its profit margin gap with Detroit competitors Ford and General Motors.
Chrysler said its profit margin, the percentage of revenue it gets to keep, was 4.6 percent last quarter, but GM topped 9 percent in North America and Ford was 7.1 percent.
"We're the fastest-growing manufacturer at the moment in the U.S. marketplace," Palmer said. "As we upgrade our vehicle portfolio, we continue to focus clearly on growing market share, improving price positions."
Palmer also said that recalls increased costs by $200 million last quarter.
On Tuesday, Fiat Chrysler reported that CEO Sergio Marchionne exercised stock options that raised his stake in the company to 12.1 million shares, or 1 percent of the company. Those were worth $134 million at Tuesday's closing price.
Marchionne, who also cashed in stock options from CNH Industrial, turned around and sold shares in both companies, netting a 15.1 million euro ($18.8 million) pretax profit.
Shares of Fiat Chrysler were up 12 cents, or just over 1 percent, to $11.17 in afternoon trading.