Chrysler Group LLC today reported its preliminary second-quarter financial results, including net income of $436 million, an 806 million improvement from the $370 million net loss in the same quarter last year, which had included a $551 million charge related to repayment of its government loans. Excluding the charge, net income increased $255 million, or 141 percent, period over period, as the Company continues to achieve its business targets and improve sales across all brands.
“Our results reflect a tireless pursuit by the people of Chrysler Group to deliver the very best quality and value across our brands,” said Sergio Marchionne, Chrysler Group LLC Chairman and Chief Executive Officer. “Together, we are always striving to achieve more, to learn from the past and build upon our successes.
Nowhere is our dedication more evident than in the all-new Dodge Dart, with up to 41 mpg highway and levels of customization not typically found in the compact car segment.” Revenue for the quarter was $16.8 billion, up 23 percent from $13.7 billion in the second quarter of 2011, primarily driven by a 22 percent period-over-period increase in shipments. For the first six months, the Company recorded net income of $909 million on revenue of $33.2 billion. The Company recorded a Modified Operating Profit of $755 million, or 4.5 percent of revenue, in the second quarter, up 49 percent from the $507 million reported in the prior year. The increase was attributable to strong volume and pricing, partially offset by unfavorable mix as we increased sales of cars versus trucks and SUVs, enhanced vehicle content and increased research-and-development spending for new models. Modified Operating Profit for the first half of the year was $1.5 billion.
Modified EBITDA(c) was $1.4 billion in the second quarter, or 8.5 percent of net revenue, an increase of 10 percent versus the prior year. Modified EBITDA was $2.8 billion for the first six months of 2012.
Interest expense for the quarter totaled $278 million, including $31 million of non-cash interest accretion, versus $328 million in the second quarter of 2011, including non-cash interest accretion of $51 million. The reduction of $50 million reflects interest savings achieved as a result of the Company’s debt refinancing transaction completed in May 2011. For the first six months, interest expense was $555 million, including $62 million of non-cash interest accretion.
Cashas of June 30, 2012, increased to $12.1 billion from $11.3 billion as of March 31, 2012, and $10.2 billion as of June 30, 2011. Total available liquidity as of June 30, 2012, totaled $13.4 billion, including $1.3 billion available under a revolving credit facility. Free Cash Flow was $866 million for the second quarter of 2012, primarily reflecting improved operating performance and favorable working capital.
Gross Industrial Debt(f) at June 30, 2012, totaled $12.5 billion, substantially in line with the $12.6 billion at March 31, 2012, and $12.3 billion at June 30, 2011. The increase in cash reduced Net Industrial Debt to $432 million at the end of the quarter, well below the $1.3 billion and $2.1 billion levels as of March 31, 2012, and June 30, 2011, respectively.
Worldwide vehicle shipments for the quarter were 630,000, including 23,000 of contract manufactured vehicles, an increase of 22 percent from the second quarter of 2011 when 514,000 vehicles were shipped (including 11,000 contract manufactured vehicles). For the first half of 2012, worldwide vehicle shipments were 1.2 million, up 24 percent from 1.0 million in the first half of 2011 and in line with the full-year target.
Worldwide vehicle sales were 582,000 for the second quarter, up 20 percent from the 486,000 vehicles sold in the second quarter of 2011. The increase was driven by a 24 percent increase in the Company’s total U.S. sales, which included a 32 percent increase in U.S. retail sales. Worldwide vehicle sales were 1.1 million for the first half of the year, up from 880,000 in the prior year. Chrysler Group’s June 2012 U.S. sales reflected 27 consecutive months of year-over-year sales gains. The continuing improvement reflects increased consumer confidence in our product portfolio, with U.S. sales of the Jeep Wrangler setting another all-time sales record in June 2012, and the Chrysler 300 posting a 151 percent U.S. sales increase in the second quarter. Chrysler Group U.S. market share increased to 11.2 percent for the quarter from 10.6 percent one year ago; market share in Canada was 14.5 percent in the second quarter.
U.S. dealers’ days’ supply of inventory at the end of June 2012, was 67 days, compared with 68 days at the end of June 2011.
For the quarter, international vehicle sales (outside North America) increased 58 percent from the same quarter of 2011, to 70,000, including 19,000 vehicles manufactured by Chrysler Group and sold by Fiat.
The all-new Dodge Dart began arriving in showrooms and early accolades for its interior, new technologies and overall value continue to accumulate.
The targets for 2012 are confirmed as follows:
Worldwide vehicle shipments of 2.3-2.4 million
Net revenue of~ $65 billion
Modified Operating Profit of > $3.0 billion
Net income of~ $1.5 billion
Free Cash Flow of > $1 billion
Significant Corporate Events in the Second Quarter of 2012 and subsequent
April 9: Chrysler Group announced that its Dundee (Mich.) Engine Plant and Windsor (Ont.) Assembly Plant were each awarded bronze status for their efforts implementing World Class Manufacturing (WCM), the highest ranking of any of the Company’s North American manufacturing facilities. In July, the Toledo Assembly Complex also was awarded bronze status.
April 25: Chrysler Group notified Ally Financial Inc. (Ally) of its election not to renew its current “Auto Finance Operating Agreement” following the April 30, 2013, expiration. Chrysler Group is in discussions with Ally and other financial institutions regarding various options to meet the financing needs of Chrysler Group dealers and customers.
April 30: Chrysler Group announced that for the first time in its history, the Company will have an office presence in downtown Detroit. Chrysler Group will occupy the top two floors of the historic Dime Building. The building, to be called “Chrysler House,” will be home to Chrysler Group’s Great Lakes Business Center and several corporate functions.
June 14: Chrysler Group announced the appointment of Ruth J. Simmons and Erickson N. Perkins as independent directors to its Board.