The Fiat 500 will begin rolling into U.S. showrooms by December.
Chrysler Group LLC reported an $84 million net loss for the third quarter of 2010, the only one of the domestic makers to go into the red during the July-September period.
But the maker’s results nonetheless exceeded expectations announced a year ago, in the months after Chrysler emerged from Chapter 11 protection. And company officials are now projecting an operating profit of $700 million for the full year, up from an earlier outlook of $200 million.
The third-quarter results followed less than a week after Chrysler announced a 37% upturn in October sales, its seventh monthly increase in a row, and the biggest gain of any of the domestic Big Three. (October sales, Click Here.)
Chrysler said its revenues for the third quarter totaled $11.02 billion, a 5.2% gain. Excluding the cost of servicing the loans it has received from the U.S. Treasury as part of its 2009 bailout, Chrysler said it would have had a $239 million operating profit for the third quarter.
The net loss was nonetheless down from a $172 million deficit during the second quarter of this year, reflecting a variety of factors including both cost cutting and improved sales. The maker recently launched an all-new version of the Jeep Grand Cherokee, the division’s flagship. It has 16 new or refreshed models coming to market for the 2011 model-year.
(For more on the nascent Chrysler turnaround, Click Here.)
“Chrysler’s financial success is dependent upon the vehicles we design, build and sell,” said CEO Sergio Marchionne, in a statement accompanying the maker’s earnings release.
One of the most significant launches for the new model-year will be the Fiat 500, an American version of the popular European minicar. It will be sold through a separate new distribution channel, marking the first sale of Fiat products in the U.S. in two decades. Marchionne serves as CEO of both Chrysler and its Italian partner, Turin-based Fiat.
The challenge for the maker will be to boost its relatively dismal quality up to industry benchmark levels, David Champion, head of auto testing for Consumer Reports magazine, stressed last month after announcing that the publication would recommend only one Chrysler product, the Ram 1500 pickup. (Click Here for more.)
For his part, Marchionne stressed that, “We are committed to ensuring that every new vehicle this company launches has the same high quality and technological advances as the Jeep Grand Cherokee. Our 2010 accomplishments are just the beginning of building Chrysler Group into a vibrant and competitive auto maker.”
Marchionne has said he hopes to take Chrysler public again sometime in the latter half of 2011. The timing could be influenced by the results of the upcoming IPO at General Motors, which also went through bankruptcy in 2009. While specific timing has yet to be announced, GM’s initial public offering is expected to take place around November 18th.
GM is expected to report a profit of $2.1 billion for the third quarter, this week. Last month, Ford announced its best third-quarter earnings, of $1.69 billion, since 1990.