(Corrects third paragraph to say "2.2 billion in 2012" from
"2.2 billion in 2013")
By Bernie Woodall and Deepa Seetharaman
Jan 30 Chrysler Group LLC, the U.S. automaker
majority owned by Italy's Fiat, said its 2013 profit
would come in toward the low end of its initial business plan,
and it cut its 2014 free cash flow forecast by two-thirds.
The No. 3 U.S. automaker, which also reported higher
fourth-quarter earnings on Wednesday, now expects free cash flow
of $1 billion in 2014. In 2009, Chief Executive Officer Sergio
Marchionne had forecast $3 billion as part of his five-year
business plan designed to help Chrysler regain its footing after
its government-funded bankruptcy nearly four years ago.
Chrysler added that it expected free cash flow to shrink
this year to about $1 billion or higher from $2.2 billion in
2012 as the automaker anticipates higher capital spending and
But Marchionne, who had led both Fiat and Chrysler since
2009, was quick to add during a conference call with reporters
and analysts that he expected the company's cash flow this year
to be "well above" the $1 billion mark.
Chrysler's modified operating profit forecast of $3.8
billion in 2013 is nearly one-third higher than 2012 levels.
Initially, Marchionne forecast a 2013 profit of between $3.8
billion and $4.4 billion.
Chrysler expects profit margins to rise to 5 percent from
4.4 percent last year. Revenue is expected to increase at least
9 percent to between $72 billion and $75 billion.
Since 2009, Chrysler has overhauled its lineup and emerged
as the chief source of strength for Fiat as economic weakness in
Europe hurts its sales. But Chrysler has also made its own
missteps, as with the shaky introduction of its Dodge Dart
compact car last year.
Fiat now owns 58.5 percent of Chrysler. The rest of Chrysler
is owned by a retiree healthcare trust affiliated with the
United Auto Workers union.
"While we are pleased to have achieved strong financial
results in 2012, the enterprise we are crafting is not
complete," Marchionne said in a statement.
Chrysler added that it planned to have 16 Fiat and Alfa
Romeo models in its North American lineup by 2016.
For the fourth quarter, Chrysler reported a 68 percent rise
in net income to $378 million from $225 million a year earlier,
driven by higher vehicle sales in North America.
The Auburn Hills, Michigan-based company said its net income
would rise to about $2.2 billion in 2013 from $1.67 billion in
(Reporting by Bernie Woodall in Detroit; Editing by Lisa Von