Chrysler saw its net income rise 32% during the third quarter due to an increase in vehicle sales, like the Chrysler 200.
Chrysler Group LLC reported that its net income increased by 32% to $611 million for the third quarter while its revenue increased by 18% to $20.7 billion. The increases came on the backs of improved sales across its lineup.
“Jeep sales were up 44% while Ram sales were up 27% and marketshare in the U.S. increased by one full point to 12.3%,” said Richard Palmer, Chrysler’s chief financial officer. “We’re clearly the fastest growing company in the American market.”
The automaker expects worldwide vehicle shipments to reach 2.9 million units this year, which will generate $80 billion in revenue with adjusted net income coming in between $2.3 billion and $2.5 billion, Palmer said.
Palmer told analysts that Chrysler profits increased despite the higher warranty costs of roughly $300 million driven by recall campaigns. Chrysler continues to report its financial results independently as part of its bond agreements.
“We haven’t given any guidance for 2015 and won’t until the end of the year,” he said.
Palmer added Chrysler is looking for ways to boost profit margins per unit, which trails those posted by General Motors and Ford Motor Co.
Net revenue for the first nine months of the year was $60.1 billion, up from $50.9 billion a year ago. The increase in third-quarter year-over-year revenues was driven by higher shipments, in particular from the Jeep Cherokee and Chrysler 200.
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Worldwide vehicle sales were 711,000 for the third quarter, up 18% from 603,000 sold in the third quarter of 2013, driven largely by a 20% increase in the company’s U.S. retail sales. Worldwide vehicle sales were 2.1 million for the first nine months of the year, up 14% from 1.8 million in the prior year. U.S. fleet sales as average of total U.S. sales were 18% in the third quarter this year, consistent with the prior year.
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Vehicle sales outside North America increased 11% from the third quarter of 2013, to 91,000, including 12,000 vehicles manufactured by Chrysler Group and sold as Fiat and Lancia-branded models outside North America.
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The Chrysler Group’s adjusted net income for the first nine months of 2014 was $1.7 billion, up from $1.2 billion in the first nine months of 2013. The adjusted net income excludes the unfavorable effects of infrequent items recorded in the first quarter of 2014, related to the prepayment of a note held by the UAW Retiree Medical Benefits Trust (VEBA Trust Note) and a charge for commitments associated with the January memorandum of understanding signed with the UAW. Including the infrequent items, net income for the first nine months of 2014 was $540 million.
U.S. dealers’ days’ supply of inventory at the end of September 2014 was 71 days, compared with 72 days at the end of June 2014, and 62 days at the end of September 2013.