Chrysler Swings to Profit in 2011

Chrysler Swings to Profit in 2011

CEO Sergio Marchionne declares that the automaker's 'house is in good order.'

Even after Chrysler emerged from bankruptcy reorganization summer 2009, there were murmurs that the embattled automaker might not survive in this cutthroat global economy, that the recession might have delivered the deathblow to the runt of the Big Three.

What a difference a year makes.

Proving the naysayers wrong, the new Chrysler Group LLC reported a preliminary net income of $183 million for full-year 2011, a dramatic improvement from its loss of $652 million in 2010.

The swing to the black includes a $551 million loss stemming from Chrysler's repayment of government bailout loans to the United States and Canada, some six years early, the company noted. Excluding the charge, adjusted net income for full-year 2011 was $734 million, beating the company's 2011 guidance.

"Chrysler is the surprising comeback kid -- again," commented senior analyst Michelle Krebs. "When Chrysler emerged from bankruptcy, there were plenty of skeptics, but the automaker has proven them wrong.

"Since detailing its plan for the future in November 2009, Chrysler has done everything it said it would, creating an impressive recent track record and providing confidence that it will meet its 2012 goals."

The turnaround is another feather in the cap of Fiat SpA CEO Sergio Marchionne, whose company now holds a 58% stake in Chrysler.

Marchionne: 'We greet a new year of high expectations with our heads down.'
"The house is in good order. We are proud of the work we've done," said Marchionne, Chrysler's chairman and CEO. "Now we greet a new year of high expectations with our heads down, forging ahead and focused on executing the goals we've set for ourselves as a company."

Chrysler reported fourth-quarter net income of $225 million, compared with a year-over-year loss of $199 million.

Among the highlights of the automaker's full-year and fourth-quarter results, Chrysler reported:
  • Full-year net revenue of $55 billion, up 31% from 2010.
  • Fourth-quarter net revenue of $15.1 billion, up 41% year-over-year.
  • Full-year free-cash flow of $1.9 billion, driving cash at year-end 2011 to $9.6 billion, up from $7.3 billion a year prior.
  • Worldwide vehicle shipments of 2 million units for full-year 2011, up from 1.6 million units in 2010.
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