Chrysler reports $690 million in Q1 net loss due to merger costs
Chrysler Group has reported a net loss of $690 million in the first quarter because it paid costs associated with its completed merger with Fiat. The net loss was Chrysler’s first since Q2 2011. Without the two charges associated with its merger, profit was at $486 million.
One year earlier, Chrysler posted a net profit of $166 million. Chrysler said that it was confirming its guidance for the year and is expected to generate around $80 billion in revenues and $2.4 billion in profits before one-time charges. Chrysler took a $504 million loss on the elimination of debt related to the prepayment of its note with the UAW Retiree Health Care Trust. Chrysler also took a $672 million charge for commitments it made to allow Fiat S.p.A. to purchase the UAW VEBA’s remaining shares in Chrysler.
Chrysler had the largest marketshare gain of any major automaker during the first quarter by gaining 1.1 percentage points in the U.S. over the same period a year ago to 12.7% on U.S. sales of 476,000 vehicles. Chrysler’s U.S. sales were up 11% during the first three months of 2014 as a 30% gain in pickup and SUV sales offset a 30% decline in car sales. Chrysler delivered 668,000 vehicles in the quarter, including vehicles it makes for other companies like its parent company Fiat.
The first quarter revenue grew 23% to $19 billion. Chrysler reported cash of $12.4 billion, up from $11.9 billion one year ago. Chrysler said it had a gross industrial debt of $12.9 billion, up from $12.5 billion at the same point in 2013. Chrysler spent around $100 million during Q1 on recalls and said that the company did not have a capacity constraint on the recently launched Ram 1500 EcoDiesel pickup.