UPDATE 2-Chrysler earnings down 65 pct on product launches
DETROIT, April 29 (Reuters) - Chrysler Group LLC said on Monday quarterly profit fell 65 percent as it absorbed the costs of new-vehicle launches.
The No. 3 U.S. automaker, which emerged from a government-sponsored bankruptcy four years ago, stood by its financial forecasts for 2013, including net income of $2.2 billion, up from $1.7 billion in 2012.
"We remain on track to achieve our business targets, even as the first-quarter results were affected by an aggressive product launch schedule," said Sergio Marchionne, chief executive of both Chrysler and its parent, Fiat SpA .
Separately, Fiat posted first-quarter group trading profit of 618 million euros ($805 million), below analysts' average forecast of 720 million euros. It reported continued losses in Europe, where the car market weakened further.
At Chrysler, first-quarter net income fell to $166 million from $473 million a year earlier. Net revenue slipped 6 percent to $15.4 billion.
The company said it had $11.9 billion of cash as of March 31, up from $11.6 billion at the end of 2012.
Chrysler said it still expects 2013 net revenue of $72 billion to $75 billion, boosted by a strong second half. It expects free cash flow of at least $1 billion.
Marchionne in January warned that Chrysler's first-quarter earnings would be down from a year earlier because of the expense of product launches and the fact that the Jeep Liberty SUV was no longer being produced.
The Liberty's successor, the Jeep Cherokee, was not sold in the first quarter.
Marchionne said earlier this month that there was a 50-50 chance the Fiat buyout of Chrysler would be completed by June 2014. If Fiat, which now owns 58.5 percent of Chrysler, buys the rest and then merges with Chrysler, it would create the world's seventh-largest automaker.
Fiat is in advanced talks with banks for financing to buy the minority stake in Chrysler owned by a United Auto Workers union retiree healthcare trust, sources told Reuters last week. The talks are expected to conclude in May.
The trust, a voluntary employees beneficiary association, or VEBA, owns 41.5 percent of Chrysler.
The value of a 16.6 percent stake owned by the trust is disputed by Fiat and the VEBA. The issue is now before a Delaware court.
Chrysler says it will increase vehicle shipments in the second quarter by at least 13 percent from the first quarter.
Shipments from April through June will be at least 650,000 vehicles, up from 574,000 in the first quarter, Chrysler said in a slide presentation after it issued its quarterly earnings report on Monday.
Of the vehicles the company shipped in the first quarter, 73 percent went to the U.S. market, up from 69 percent a year earlier.
- California passes 'yes-means-yes' campus sexual assault bill
- IBM launches Watson system for research, hopes for breakthroughs
- Separatists say will allow 'trapped' Ukrainian forces to withdraw |
- In town halls, U.S. lawmakers hear voter anger over illegal migrants |
- U.N. says 43 Golan peacekeepers seized by Syria militants, 81 trapped