* Chrysler CEO Marchionne tells employees to "stay focused"
* Fiat to report earnings, update strategy on Tuesday
* Chrysler sees Q4 net income of about $210 million
* Chrysler sees Q4 revenue of $16.4 billion
By Bernie Woodall
DETROIT, Oct 29 Chrysler Group LLC posted an 80
percent rise in quarterly net income on Monday on stronger new
vehicle sales, continuing the U.S. automaker's comeback from its
Chrysler, majority owned by Italy's Fiat SpA, also
reaffirmed its outlook for the year. Fiat will issue its
earnings on Tuesday.
Net income in the third quarter rose to $381 million from
$212 million a year earlier. Net revenue increased 18 percent to
Globally, Chrysler's auto sales rose 12 percent to 556,000
vehicles in the quarter.
"We've changed the conversation at Chrysler Group," said
Sergio Marchionne, chief executive of both Chrysler and Fiat.
Chrysler reaffirmed its 2012 forecast that calls for net
income of about $1.5 billion on net revenue of about $65
Accounting for the full-year outlook, Chrysler expects
fourth-quarter net income of about $210 million on revenue of
Chrysler's free cash flow will be "well in excess" of $1
billion for the year, Marchionne said.
In an e-mail to Chrysler employees, Marchionne said, "The
third-quarter financial results that we released today represent
another pillar in the platform of accountability that we are
In addition to the earnings report on Tuesday, Fiat has
pledged to give an update on its strategy, particularly in
Europe's debt crisis, government spending cuts and high
unemployment have hit consumer budgets and sent demand plunging,
with new car registrations in the region showing the sharpest
contraction in 12 months in September.
This year, Chrysler's balance sheet has become much stronger
than Fiat's, primarily because of strong sales in its primary
North American market.
While Chrysler has revamped what was a stale product lineup
when Fiat took over management control in 2009, Marchionne urged
employees to "stay focused."
Chrysler's competitors, he said, "are not showing signs of
vulnerability, and we will have to continue fighting for our
share. But we are going in the right direction."
Marchionne said that the two most important new products for
the company this year, the compact Dodge Dart and its new Ram
1500 pickup truck, are getting positive reviews from auto
However, the influential U.S. magazine, Consumer Reports, on
Monday said three of Chrysler's brands, Dodge, Chrysler and
Jeep, each fell in its reliability ratings of 28 auto brands
sold in the United States.
In the first nine months of the year, Chrysler's global
sales were 1.86 million, up 12 percent from the same period in
In the first nine months of the year, Chrysler's U.S. sales
rose 24 percent to 1.25 million vehicles, according to Autodata
Corp. Chrysler is the No. 4 automaker by sales in the U.S.
market, trailing, in order, General Motors Co, Ford Motor
Co and Toyota Motor Corp.
Fiat owns 58.5 percent of Chrysler. The remaining 41.5
percent is owned by a United Auto Workers union healthcare trust
for retired Chrysler workers, which is a voluntary employees
Each half year beginning in the current six-month period,
Fiat is allowed to exercise a call option for up to 3.3 percent
more of Chrysler Group at a price determined by a formula set up
in 2009. Fiat can buy up to 16.58 percent of Chrysler in this
Fiat sued the healthcare trust in September because the
trust did not sell the 3.3 percent share in July as Fiat had
requested. The two sides differ on the price that Fiat is to pay
for the increased share. Fiat offered $139.7 million.
The matter is pending at a court in Delaware.
Marchionne said this month that plans to merge Chrysler and
Fiat will not be affected by the lawsuit.