Chrysler net income rises 22%

Increase aided by SUV, truck sales

8/6/2014

In its first earnings report since Fiat shareholders gave their blessing to the Chrysler-Fiat merger, Chrysler Group today reported net income of $619 million for the second quarter, up 22 percent from the period a year ago.

The company said net revenue for the quarter was $20.5 billion, up 14 percent from a year ago. Chrysler said sales of vehicles like the Ram pickup and the new Jeep Cherokee “drove the year-over-year improvements,” as global sales rose 12 percent for the quarter.

Chrysler’s trucks and SUVs continue to power the company’s performance, while its passenger cars have lagged. In July, sales rose 20 percent from a year ago, relying almost exclusively on SUVs and trucks. Jeep sales soared 41 percent, the best sales month ever for the brand.

Fiat shareholders gave their approval last week to merge Chrysler and Fiat into a single corporation. The combined company will be headquartered in London and incorporated in the Netherlands. But Chrysler’s U.S. operations will remain centered in Auburn Hills, Michigan.

Today’s earnings are another sign that Chrysler will continue to be the profit engine that powers Fiat as the companies integrate their operations.

But Chrysler’s strong sales performance this year has come with heavy discounting.

Fiat, which reported its own earnings last week based on international accounting rules, said that its second-quarter profits fell 55 percent from last year. Sergio Marchionne, chief executive of Fiat and Chrysler, told investors last week that Chrysler had to increase its incentives to help move older models during the quarter.

Data provided by Edmunds.com, which tracks industry incentives, shows the Chrysler 300 topped the list for nonluxury cars in June, tied with Toyota’s Prius. Chrysler offered $6,720 of combined discounts, according to Edmunds, up 47 percent from last year.