The belated launch of the 2014 Jeep Cherokee helped buoy Chrysler's Q4 earnings.
Chrysler Group more than quadrupled its earnings for the final quarter of 2014 — in part due to a huge one-time tax gain, but also due to a surge in U.S. car sales.
The smallest of the domestic makers this morning reported net income of $1.62 billion for the fourth quarter, a figure including a $962 million one-time tax benefit. Even without that boost Chrysler would have come in 74% ahead of the final quarter of 2012. For the full year, meanwhile, the maker earned $1.8 billion after excluding one-time gains, a 9% bounce over all of 2012.
The full-year earnings were Chrysler’s best since it exited Chapter 11 bankruptcy protection in 2009.
“The 2013 year-end financial results reflect the commitment Chrysler Group has made to rapidly refresh our product lineup with vehicles that achieve exacting performance standards,” Sergio Marchionne, CEO of both the Chrysler Group and Fiat SpA, said in a statement.
That’s particularly good news for Fiat, the Italian automaker that rescued Chrysler from bankruptcy in 2009 and which completed its takeover of the U.S. maker last week. Fiat earned just 252 million Euros during the fourth quarter of 2013, or $345 million. And without the profit it booked on Chrysler, the Italian company would have gone 235 million Euros, or $321 million, into the red.
(Click Here to see how car sales are running hot despite a record cold January.)
Fiat owned a 58.5% stake in Chrysler until this month when it was able to purchase the remaining shares held.
For the full year, Fiat had a 943 million Euro profit, or $1.29 billion, but it would have sunk 911 million Euros, or $1.25 billion, into the red without Chrysler. The Italian automaker has been struggling with a variety of problems, most notably the sharp downturn in the European automotive market.
The earnings could be particularly good news for Chrysler workers who could be handed record profit sharing checks for 2013. In a note to employees, Marchionne said, “Your courage and passion have restored Chrysler to being a competitive force in the auto industry and have created a strong partner with Fiat in building an exciting new global venture.”
(Honda now exporting more cars from the U.S. than it imports. Click Here for the story.)
The fourth-quarter results mark the tenth consecutive quarter in the black and reflect a strong surge in demand for Chrysler products, especially in the home North American market. Sales also surged overseas, particularly for the Jeep brand of sport-utility vehicles – but the maker continues to lag behind its Detroit rivals in terms of going global. Notably, Chrysler was unable to wrap up negotiations to launch Jeep production in China before the end of the year.
Worldwide, Chrysler sold 2.4 million vehicles last year. In the U.S. market, Chrysler sales increased 9% in 2013, to 1.8 million vehicles. Meanwhile, it saw a considerable increase in the average consumers paid for Chrysler products. The so-called Average Transaction Price, or ATP, rose 2% for the fourth quarter alone, according to data from Kelley Blue Book, to $32,309.
For the full year, revenues increased 10% to $72 billion, Chrysler reported. Revenue for the fourth quarter rose to $21 billion. The final three months of 2013 saw the maker finally begin shipping the 2014 Jeep Cherokee. Its Jeep plant in Toledo, Ohio had been out of operation for nearly a year due to delays in launching that critical new model.
On Tuesday, Ford Motor Co. announced it had delivered $8.8 billion in net income for the full year, while advising workers they will receive record profit-sharing checks.
(For the full story on Ford’s 2013 earnings, Click Here.)