(Adds CFO comments, details of Chrysler 200 shipments)
By Bernie Woodall
DETROIT May 12 Chrysler Group LLC expects
increased vehicle shipments linked to the new Chrysler 200
midsize sedan will not have a great effect on earnings until the
third quarter, its chief financial officer said on Monday.
Shipments of the Chrysler 200 began a week ago but it will
take time for the pipeline to fill, said CFO Richard Palmer as
he discussed Chrysler's first-quarter earnings with analysts.
Sergio Marchionne, chief executive officer of Italian parent
Fiat SpA as well as Chrysler, did not participate in
the analysts' conference call after Chrysler reported a $690
million loss in the first quarter.
Chrysler, the No. 3 U.S. automaker, said the loss was due to
charges related to the merger of the two companies.
Chrysler took a $504 million non-cash charge on payments to
retire a note linked to a union healthcare trust that was the
company's minority owner until January and a $672 million charge
for payments to the United Auto Workers retiree healthcare trust
in the United States.
Excluding the items, Chrysler posted a profit of $486
million, up from $166 million a year earlier.
In January, Fiat bought the remaining shares owned by the
trust and became the sole owner of Chrysler. The newly merged
company, Fiat Chrysler Automobiles, is expected to be listed on
the New York Stock Exchange in the fourth quarter.
The redesigned Chrysler 200 is built at a suburban Detroit
plant that was slated for closure in 2009 but was recently
upgraded at a cost of $1 billion. Critics have said it is a vast
improvement over the outgoing Chrysler 200, whose sales were
less than one-third of the midsize sedan leader, Toyota Motor
Corp's Camry last year.
"About a week ago, we started shipping," said Palmer. "So,
that won't really be in full force until the third quarter,"
Companies log revenue when vehicles are shipped to dealers.
Production of the new sedan will take several months to ramp up
to full capacity.
The success of Chrysler 200 sales is key to the Chrysler
brand reaching an ambitious goal of selling 800,000 vehicles in
North America by 2018, from 350,000 last year. The goal was
announced as part of a five-year Fiat Chrysler plan issued last
Chrysler Group maintained a 2014 forecast for earnings of
between $2.3 billion and $2.5 billion, excluding special items,
on net revenue of about $80 billion.
Last Tuesday, Fiat reported a first-quarter net loss of 319
million euros ($444 million), due to one-time items related to
its deal to acquire Chrysler.
Fiat shares, which fell about 13 percent last week, dropped
almost 1 percent at 7.46 euros in trading in Milan on Monday.
Fiat shares are up 25.5 percent since Marchionne announced
the deal to fully own Chrysler at the start of the year.
(Editing by Lisa Von Ahn and Jeffrey Benkoe)