While the company posted a loss due to special charges, Chrysler's net revenue increased, in part, because of strong sales of the Jeep Cherokee.
Chrysler Group LLC today reported a net loss of $690 million for the quarter, due to special charges related to Fiat SpA’s acquisition the ownership stake in Chrysler held by the United Auto Workers VEBA.
Net revenue was $19 billion for the quarter, up 23% from $15.4 billion in the prior-year period, primarily driven by an increase in vehicle shipments, including Ram pickup trucks and the all-new Jeep Cherokee.
Chrysler’s modified operating profit during the first quarter was $586 million, or 3.1% of net revenue, compared with the $435 million reported in the year-ago period. The 35% increase was primarily due to higher shipments and improved mix, which was partially offset by increased vehicle costs due to vehicle content enhancements; higher advertising costs; higher depreciation and amortization costs due to new product launches; and foreign exchange effects.
Once again, the company had to take a charge due to the devaluation of the Venezuelan bolivar. This quarter it was $129 million compared with $78 million in the first quarter of 2013.
Modified earnings before interest taxes depreciation and amortization was $1.3 billion for the quarter, or 6.8% of net revenue, up 22% compared with $1 billion a year earlier.
Excluding the infrequent items disclosed back in January when Fiat closed the deal for with the UAW VEBA, adjusted net income for the first quarter was $486 million, up from $166 million a year ago, Chrysler reported.
The $1.2 billion in one-time charges the first quarter included a $504 million non-cash loss on extinguishment of debt related to the prepayment of the UAW Retiree Medical Benefits Trust Note and a $672 million charge for commitments associated with the January memorandum of understanding signed with the UAW in which the union made commitments to continue to support Chrysler Group’s World Class Manufacturing programs and actively assist in the achievement of the company’s long-term business plan.
Cashas of March 31, was $12.4 billion compared with $13.3 billion as of Dec. 31, 2013, and $11.9 billion on March 31, 2013. Total available liquidity as of March 31, was $13.7 billion, including $1.3 billion available under an undrawn committed revolving credit facility.
The decrease in the Company’s liquidity from Dec. 31, 2013, reflects the payment of a $1.9 billion special distribution to the company’s members in January 2014, partially offset by $919 million in first-quarter free cash flow.
Financial liabilitiesat March 31, totaled $12.9 billion, up from $12.3 billion as of Dec. 31, 2013, and $12.5 billion as of March 31, 2013, primarily due to the issuance of new debt to facilitate the prepayment of the VEBA Trust Note.
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Worldwide vehicle shipments were 668,000 for the quarter, including 11,000 contract manufactured vehicles, an increase of 16% from the first quarter of 2013, when the company shipped 574,000 vehicles, including 12,000 contract manufactured vehicles. The Jeep Cherokee was a big driver of those shipments with worldwide shipments of 62,000 during the quarter.
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Worldwide vehicle sales were 621,000 for the first quarter, up 10% from 563,000 sold in the first quarter of 2013, driven largely by a 19% increase in the company’s U.S. retail sales. U.S. fleet sales as a percentage of total U.S. sales were down from 28% in the first quarter of 2013 to 23% in the first quarter this year.
Chrysler Group’s U.S. market share was 12.5% for the quarter, up from 11.4% a year ago; market share in Canada was 16.6%, up from 16% in the year-ago period.
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U.S. dealers’ days’ supply of inventory at the end of March was 71 days, compared with 79 days at the end of December 2013, and 66 days at the end of March 2013.
International vehicle sales for the year increased 18% from the first quarter of 2013, to 79,000, including 14,000 vehicles manufactured by Chrysler Group and sold by Fiat.