Chrysler Q2 net loss widens after debt repayment
DETROIT (Reuters) - Chrysler Group LLC, which reported a wider second-quarter net loss on Tuesday, will announce a single management team for the U.S. automaker and its majority owner Fiat SpA FIA.MI in the next few days.
Sergio Marchionne, who is the chief executive of both companies, said he is putting the finishing touches on a structure that will help the companies take full advantage of their alliance.
"I spend a lot of time in terms of making sure that we pick the right people to take this on," Marchionne said on a call with analysts and reporters. "It is something that I think will start showing benefits fairly quickly in terms of being able to leverage each other."
The financial and operational bonds between the two companies are strengthening more than two years after the Italian automaker took a stake and management control of Chrysler. Last week, Fiat took a majority stake in Chrysler and the company has now folded Chrysler results into its own.
Fiat reported better-than-expected results on Tuesday, but concerns over its rising debt pushed its stock lower.
Chrysler, whose brands include Jeep, reported a net loss for the second quarter of $370 million, compared with a net loss of $172 million a year earlier.
In May, Chrysler repaid $7.6 billion in loans to the U.S. and Canadian governments stemming from its 2009 federal bailout.
Excluding a $551 million charge related to the debt repayment, Chrysler reported an adjusted profit of $181 million.
The company also repeated its outlook for 2011, which includes revenue of more than $55 billion and an adjusted net income between $200 million and $500 million.
Marchionne said the company would wait until the third quarter to revisit its earnings projections.
The company's revenue rose 30 percent from a year earlier to $13.7 billion. Average transaction prices jumped 7 percent in the quarter.
Chrysler reported a 19 percent increase in worldwide vehicle sales, helped by sales of the Jeep Grand Cherokee, Chrysler 200 and the Dodge Durango in the company's biggest market, the United States.
Those vehicles were part of Chrysler's 16 new and revamped products unveiled in late 2010. The U.S. automaker is now developing a smaller sedan that will compete with Honda Motor Co Ltd's (7267.T) Civic and Toyota Motor Corp's (7203.T) Corolla.
No. 2 U.S. automaker Ford Motor Co (F.N) also reported second-quarter earnings on Tuesday, beating Wall Street expectations by 5 cents a share. Ford's net income fell to $2.4 billion in the quarter, or 59 cents per share, from $2.6 billion, or 61 cents per share, a year ago.