If there is one thing that should be remembered when looking at quarterly and annual earnings, it's that the headline numbers rarely tell the whole story when it comes to an automaker's health. Chrysler's first-quarter earnings are just such an example.

Yes, the Auburn Hills-based manufacturer lost $690 million, which is quite a large sum of money. The reasons for the loss, according to Chrysler, were "Unfavorable infrequent items," which includes a $504 million payment to rid itself of the debts it took on for prepaying the UAW's VEBA healthcare trust. Chrysler was also hit with a $672 million charge to the UAW, which was part of a deal that allowed Fiat to purchase the remaining shares of Chrysler owned by the VEBA.

Ignoring those one-time deals, the first quarter was quite a successful one for Chrysler. It would have made $486 million if you erased the merger costs, which would have been a year-over-year increase of $320 million. Even more promising is the fact that Chrysler snagged the largest increase in market share of any automaker during Q1 at 1.1 percent, bringing its overall share to 12.7 percent of the US market. Chrysler saw a 30-percent improvement in sales of trucks and SUVs, along with an 11-percent increase in year-over-year sales and a 23-percent increase in revenue, to $19 billion.

Overall, not a bad first quarter for Chrysler, provided you ignore its one-time costs. With those merger-related charges settled, it should be pretty interesting to see how Chrysler does in the rest of 2014. Scroll down for the full set of details on Chrysler's Q1 financials.
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Chrysler Group Reports First-quarter 2014 Net Loss of $690 Million Including $1.2 Billion of Unfavorable Infrequent Items; Excluding Infrequent Items, Adjusted Net Income Was $486 Million

Modified Operating Profit Was $586 Million, Up 35 Percent From the Prior Year; Free Cash Flow Was $919 Million

Chrysler Group reported a first-quarter net loss of $690 million, including a $504 million non-cash loss on extinguishment of debt related to the prepayment of the VEBA Trust Note and a $672 million charge($499 million non-cash in 2014) related to the January 2014 memorandum of understanding signed with the UAW
Adjusted Net Income(a) for the quarter, excluding the above infrequent items, was $486 million, up from$166 million a year ago
Net revenue for the quarter was $19 billion, up 23 percent from a year ago
Modified Operating Profit(b) grew 35 percent to $586 million for the quarter, up from $435 million a year earlier
Free Cash Flow(e) for the first quarter was $919 million, compared with $449 million a year ago; Cash(d) as of March 31, 2014, was $12.4 billion
Net Industrial Debt(f) at quarter end was $551 million compared with $619 million at March 31, 2013, and Net Industrial Cash of $1 billion at Dec. 31, 2013
Worldwide vehicle shipments were 668,000 for the quarter, up 16 percent from 574,000 a year ago
Worldwide vehicle sales for the first quarter were 621,000, up 10 percent from a year ago, driven primarily by a 19 percent increase in U.S. retail sales
U.S. market share was 12.5 percent for the first quarter, compared with 11.4 percent a year ago; market share in Canada was 16.6 percent for the quarter, up from 16 percent a year ago


May 12, 2014 , Auburn Hills, Mich. - Chrysler Group LLC today reported preliminary first-quarter 2014 financial results. The Company recorded a net loss of $690 million for the quarter, reflecting the unfavorable effects of two significant infrequent items. Excluding the infrequent items, Adjusted Net Income for the first quarter was $486 million, up from $166 million a year ago.

Infrequent items of $1.2 billion in the first quarter included a $504 million non-cash loss on extinguishment of debt related to the prepayment of the UAW Retiree Medical Benefits Trust Note (VEBA Trust Note), and a $672 million charge for commitments associated with the January memorandum of understanding (MOU) signed with the UAW in which the union made commitments to continue to support Chrysler Group's World Class Manufacturing (WCM) programs and actively assist in the achievement of the Company's long-term business plan.

Net revenue was $19 billion for the quarter, up 23 percent from $15.4 billion in the prior-year period, primarily driven by an increase in vehicle shipments, including Ram pickup trucks and the all-new Jeep Cherokee.

Modified Operating Profit was $586 million in the first quarter, or 3.1 percent of net revenue, up from $435 million reported in the prior-year period. The 35 percent increase was primarily due to higher shipments and improved mix, partially offset by increased vehicle costs due to vehicle content enhancements; higher advertising costs; higher depreciation and amortization costs due to new product launches; and foreign exchange effects, including the devaluation of the Venezuelan bolivar, which accounted for a charge of $129 million in the first quarter of 2014 compared with a devaluation charge of $78 million in the first quarter of 2013.


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    • 1 Second Ago
  • 16 Comments
      Benjamin Roethig
      • 7 Months Ago
      So, basically a really good quarter dragged down by $1 billion worth of merger costs.
      bootsnchaps60
      • 7 Months Ago
      I'm surprised that there isn't a flood of Fiat is killing Chrysler, Fix It Again Tony , etc remarks. It's a reasonable explanation of an event. Probably had Cerberus kept them Jeep would be a division of some Japanese or Chinese car company. and the rest would not exist.
        danielm26
        • 7 Months Ago
        @bootsnchaps60
        on top of it the good old Italian thinking, "get rid of debt as soon as you can" may be painful now but soon FCA will run debt free.
        ابوذر ڀرڳڙي
        • 7 Months Ago
        @bootsnchaps60
        Yeah but if Cerberus had kept them on then Jeep could one day have helped rebuild Commander Shepherd.
        ابوذر ڀرڳڙي
        • 7 Months Ago
        @bootsnchaps60
        Yeah but if Cerberus had kept them on then Jeep could one day have helped rebuild Commander Shepherd.
      David
      • 7 Months Ago
      Wow, I can't believe the lack of knowledge in the comments here. The money that went to the Union was part of the deal to acquire shares held by the Union in trust (just over 40% of Chrysler). It was part of the original Chrysler bailout package. In other words, the Union was part owner of Chrysler and, for FIAT to complete the merger, they had to buyout the Union's stake, just like buying any other company. It had nothing to do with payoffs or socialism. Under FIAT's management, Chrysler and, more specifically, Jeep has gone from being dead to making a ton of money each quarter. My only concern is the possibility that the Jeep brand will become watered down as they expand sales into China, etc. So far, though, it looks like they are succeeding in enhancing the Jeep brand. This quarter they retired debt and wrote down merger costs. It can be debated whether this was a good strategy or not. My opinion is that the time to do these things is when you are making money and can afford it. So, yes, this was a perfect time. Spreading it over several quarters would have a negative effect on the stock over to long a period of time.
        cpmanx
        • 7 Months Ago
        @David
        Thanks for the informed comments. It's worth noting that the original 2009 five-year-plan projected US market share would hit 13% in 2014, a number that was widely derided as pure fantasy. The company's share is currently 12.7% and rising.
      ebn.hahn
      • 7 Months Ago
      Oh Really!!!!!. I did not read the same argument out you regarding FORD and GM when they announced their Q1 Results!!??. Did FIAT pay you off this time!!!???. Unfortunetly for you Jack!!!, Math is Math... you add and SUBTRACT!!!!!!!
      tiger
      • 7 Months Ago
      Brandon, Its funny how you defend this loss. If this were GM under the same circumstances, You'd be calling them the worst managed company ever.
      ebn.hahn
      • 7 Months Ago
      Oh Really!!!!!. I did not read the same argument out you regarding FORD and GM when they announced their Q1 Results!!??. Did FIAT pay you off this time!!!???. Unfortunetly for you Jack!!!, Math is Math... you add and SUBTRACT!!!!!!!
      ebn.hahn
      • 7 Months Ago
      Oh Really!!!!!. I did not read the same argument out you regarding FORD and GM when they announced their Q1 Results!!??. Did FIAT pay you off this time!!!???. Unfortunetly for you Jack!!!, Math is Math... you add and SUBTRACT!!!!!!!
      NY EVO X MR GUY
      • 7 Months Ago
      Nothing like socialism. The rest of the world can barely find work, yet these people seem to have job security.
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