The Chrysler Group posted on Monday its first quarterly profit since going through bankruptcy reorganization in 2009, as the company sold more cars at higher prices.
Chrysler, the only Detroit automaker to lose money last year, earned $116 million in the quarter, after losing $197 million in the period a year ago. Revenue grew 35 percent, to $13.1 billion, while sales were up 18 percent.
“Chrysler Group's improved sales and financial performance in the first quarter show that our rejuvenated product lineup is gaining momentum in the marketplace and resonating with customers,” Sergio Marchionne, the chief executive of Chrysler and its Italian partner, Fiat, said in a statement. “These results are a testament to the hard work and dedication of our employees, suppliers and dealers, all of whom are helping Chrysler create a new corporate culture built on the quality of our products and processes, and simple, sound management principles.”
Chrysler said it had $9.9 billion in cash on hand as of March 31, an increase of $2.6 billion in three months, and $13.3 billion in debt.
The results are a milestone for Chrysler, which narrowly avoided liquidation after its decade-long tie-up with the German carmaker Daimler dissolved and a private equity firm, Cerberus Capital Management, failed in its revival efforts. The profit comes almost exactly two years after President Obama forced Chrysler to file for bankruptcy protection and form a partnership with Fiat because he and other officials believed it could not survive on its own.
Chrysler reported operating profits in each quarter of 2010, but each time interest payments to the American and Canadian governments, which totaled $1.23 billion for the year, resulted in losses over all. Chrysler lost $652 million last year.
The company also reiterated its previous forecast for net income this year of $200 million to $500 million.
The company plans to significantly reduce its interest payments by refinancing the $7.5 billion in government loans it received before and during its bankruptcy. On Monday, Chrysler said it would repay the loans by the end of June by selling $2.5 billion in bonds and borrowing from new secured credit facilities totaling $5 billion.
Interest payments in the first quarter totaled $348 million, up from $311 million in the period a year earlier. Mr. Marchionne declined last week to say how much Chrysler would save through its refinancing.
Chrysler introduced or revamped 16 models in 2010, and it said increased sales of many of them played a role in its first-quarter profit, as market share increased in the United States and Canada, its two largest markets.
Jesse Toprak, vice president for industry trends and insight at TrueCar.com, said Chrysler still needed to make its vehicle lineup more appealing, particularly in the small-car segments that have become more popular amid rising gas prices.
“The outstanding issue for them is their continued reliance on SUV’s and trucks,” Mr. Toprak said. “They're on the road to recovery, but there’s much more to be done to really claim that Chrysler is back on their feet and healthy.”
Some Chrysler began selling the tiny Fiat 500 car this spring, and it plans to bring out more small cars based on Fiat designs and technology within the next several years, but most of its focus since bankruptcy has been on redoing larger models like its Jeep Grand Cherokee and Dodge Durango sport-utility vehicles.
Chrysler remains far less profitable than its domestic competitors. Ford earned $6.6 billion last year and $2.55 billion in the first quarter of 2011. Ford’s sold 3.5 times as many cars and trucks as Chrysler last quarter, but its profit was 22 times as much as Chrysler's.
GM, which filed for and emerged from bankruptcy a month later than Chrysler, earned $4.7 billion in 2010. It is scheduled to reveal first-quarter results Thursday.
The United States and Canada own a combined 10.8 percent of Chrysler, which is expected to have an initial public offering later this year or in early 2012. Chrysler is 30 percent owned by Fiat, which plans to pay $1.27 billion for an additional 16 percent stake when the government loans are repaid. Chrysler's majority owner is currently a trust fund set up to cover the cost of health care for hourly retirees.