Chrysler Group LLC, the U.S. automaker now part of Fiat SpA (F), reported net income of $619 million for the second quarter as sales of SUVs and trucks fueled profit at the third-largest U.S. automaker.
Chrysler, which has made money in 11 of the past 12 quarters, has provided most of the income for what will become Fiat Chrysler Automobiles NV later this year. Revenue grew 14 percent to $20.5 billion and modified operating profit jumped 22 percent to $985 million.
Sergio Marchionne, chief executive officer of Chrysler and Fiat, added the U.S. automaker to create a global company with the heft to compete globally with Volkswagen AG, General Motors Co. (GM) and Toyota Motor Corp. (7203) Chrysler, which in July had its 52nd straight month of year-on-year growth in U.S. vehicle sales driven by Jeep and Ram light-truck models, has helped steady Fiat’s operations as it navigates a two-decade low in Europe.
There remains “unfilled demand” for Jeep sport-utility vehicles in the U.S., where sales are more profitable, Marchionne said today on a conference call to discuss Chrysler’s results.
“When supply is as tight as it is now, we need to be very careful that we don’t sacrifice margins,” he said. “We’ve started looking at alternatives on a global scale.”
Chrysler said Aug. 1 that its U.S. deliveries rose 20 percent to 167,667 in July, helped by a 41 percent surge for the Jeep brand.
Fiat last week reported 961 million euro ($1.29 billion) in second-quarter earnings before interest and taxes, a 10 percent decline from a year earlier. Profit at the Turin, Italy-based company was less than the 1.01 billion-euro average of five analyst estimates in a Bloomberg survey.
Fiat’s North American operations, which were non-existent before Fiat gained control of Chrysler about five years ago, accounted for 62 percent of group second-quarter operating profit, the automaker said July 30. Fiat’s European operations lost 6 million euros in the quarter. Without its U.S. division, Fiat would have been unprofitable in 2012 and 2013.
Marchionne in May laid out plans to invest 55 billion euros to more than double earnings before interest and taxes to a range of 8.7 billion euros to 9.8 billion euros from 3.5 billion euros last year. Fiat share fell almost 12 percent the next day, the most in two and a half years.
Fiat Chrysler Automobiles will have its main stock listing in New York by mid-October, while it will be registered in the Netherlands with the fiscal domicile in the U.K. for tax purposes. The headquarters will be in London.
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