Chrysler Third-Quarter Net Income Increased 80 Percent
AUBURN HILLS — Chrysler Group LLC today reported preliminary third-quarter financial results, including net income of $381 million, an increase of 80 percent from the same quarter a year ago, reflecting continued sales increases for the product lineup in total, including sales of the all-new Dodge Dart. For the first nine months of the year, net income totaled $1.3 billion.
"We've changed the conversation at Chrysler Group," said Sergio Marchionne, Chrysler Group LLC chairman and CEO. "We have revamped our product lineup with such segment-defining models as the Jeep Grand Cherokee and the Chrysler 300. Critics and consumers already are responding positively to the Dodge Dart and to the 2013 Ram 1500, with its best-in-class fuel economy. We continue to work feverishly and are pleased to see that our all-consuming aspiration for excellence is translating into results. We are confirming guidance for the year, and expect Free Cash Flow to be well in excess of $1 billion."
Net revenue for the quarter was $15.5 billion, up 18 percent from $13.1 billion in the third quarter of 2011, primarily driven by a 19 percent period-over-period increase in shipments. For the first nine months of the year, the company recorded net revenue of $48.6 billion, a 22 percent increase from the same period a year ago.
The company recorded a modified operating profit of $706 million, or 4.6 percent of revenue, in the third quarter, up 46 percent from the $483 million reported in the prior year. The increase was attributable to increased sales volumes and pricing, partially offset by unfavorable mix, including higher growth in passenger car sales versus trucks and SUVs, increased research-and-development costs for future models and higher advertising costs. Modified operating profit for the first nine months of the year was $2.2 billion, a 50 percent increase from the same period last year.
Modified EBITDA was $1.3 billion in the third quarter, or 8.4 percent of net revenue, an increase of 17 percent versus the prior year. For the first nine months of the year, Modified EBITDA was $4.1 billion.
Interest expense for the quarter totaled $273 million versus $282 million in the third quarter of 2011, including non-cash interest accretion of $29 million in each period. For the first nine months of 2012, interest expense was $828 million, including $91 million of non-cash interest accretion.
Gross industrial debt at Sept. 30 totaled $12.6 billion, slightly higher than the $12.5 billion at June 30, and $12.3 billion at Sept. 30, 2011. The decrease in cash resulted in a net industrial debt level of $0.7 billion at the end of the quarter, slightly higher than $0.4 billion at June 30, but well below $2.9 billion at Sept. 30, 2011.
Worldwide vehicle shipments for the quarter were 559,000, an increase of 19 percent from the third quarter of 2011 when 469,000 vehicles were shipped. For the first nine months of the year, worldwide vehicle shipments were 1.8 million, up 22 percent from the same period a year ago, and in line with our full-year target of 2.3 million to 2.4 million vehicles.
Worldwide vehicle sales were 556,000 for the third quarter, up 12 percent from the 496,000 vehicles sold in the third quarter of 2011. The increase was driven by a 13 percent increase in the company's total U.S. sales, which included a 16 percent increase in U.S. retail sales. Worldwide vehicle sales were 1.7 million for the first nine months of the year, up from 1.4 million in the prior year. Chrysler Group's September U.S. sales continued the trend with a 30th consecutive month of year-over-year sales gains. The continuing improvement reflects consumer confidence in our product portfolio, including a 46 percent year-to-date increase in passenger car sales versus the prior year. Chrysler Group's U.S. market share for the quarter was 11.3 percent; market share in Canada was 14.3 percent for the quarter.
U.S. dealers' days' supply of inventory at the end of September 2012, was 65 days, compared with 67 days at the end of June 2012, and 54 days at the end of September 2011, which was low due to parts supply shortages.
For the quarter, international vehicle sales (outside North America) increased 27 percent from the same quarter of 2011, to 68,000, including 15,000 vehicles manufactured by Chrysler Group and sold by Fiat.