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Chrysler posts Q3 profit, lifts 2011 outlook

Tags: Chrysler

Chrysler Group LLC boosted its full-year profit outlook Thursday after it reported a third-quarter profit lifted by a 24 percent jump in global vehicle sales.

Chrysler now projects an adjusted net income of $600 million US for 2011. Earlier, it predicted net income would be between $200 million and $500 million.

The U.S. automaker, which is majority owned by Italian automaker Fiat SpA, reported $212 million in net income, reversing an $84 million net loss a year earlier.

The Auburn Hills, Michigan-based company reported results one day after its pact with the United Auto Workers union was ratified by workers. Chrysler was the last company to reach a deal after General Motors Co and Ford Motor Co.

It is the first labour contract for Chrysler since it emerged from a bankruptcy restructuring in 2009 that put the company in the hands of Fiat and its Chief Executive Sergio Marchionne.

Marchionne, who is CEO of both Chrysler and Fiat, pressed the union for a deal that would keep the company's labor costs low, citing the still-tentative nature of Chrysler's recovery.

"In October, together with the United Auto Workers, we crafted a solid four-year contract that will support us in our growth plans and significantly reward our employees for their contribution to the revival of Chrysler," Marchionne said in a statement.

Revenue shot up 19 percent to $13.1 billion, while its market share in the United States increased to 11.4 percent, up from 9.6 percent a year ago. The company had $9.5 billion in cash on hand in the third quarter.

Chrysler's performance is expected to boost Fiat's results, which have been troubled by weak European sales. Fiat now has a 53.5 percent stake in the U.S. automaker and that is set to rise to 58.5 percent by year's end.

Earlier this year, Chrysler refinanced $7.6 billion in government debt stemming from its 2009 bankruptcy. The company's 2011 profit outlook excludes a one-time $551 million charge the company took for refinancing its bailout debt. CTV Two CTV News CTV News Channel BNN - Business News Network CP24