Chrysler Group LLC, 25% owned by Italy’s Fiat SpA (FIATY), posted a narrower loss of $199 million in the fourth quarter of 2010 compared with $2.69 billion in the same quarter of prior year. The company’s loss was attributable to $1.2 billion of interest charges on its debt. Revenues for the quarter grew 14% to $10.76 billion.
For full year 2010, the company recorded a loss of $652 million. Operating profit was $763 million, which was higher than its previous forecast of break-even results. It has also generated free cash flow of $1.4 billion, which exceeded the earlier guidance by $2 billion. The company had cash balance of $7.3 billion at the end of 2010.
However, the automaker expects to report a net profit of $200 million–$500 million and generate positive free cash of $1 billion for full year 2011 based on its replenished product lineups. The company has not yet reported a profit since emerging from bankruptcy in June 2009.
Chrysler’s hometown rival, Ford Motor Co. (F) posted a 24% fall in profit to $1.2 billion or 30 cents per share (before special items) in the quarter under study from $1.58 billion or 43 cents per share (before special items) in the fourth quarter of 2009. With this, the automaker has missed the Zacks Consensus Estimate by 19 cents per share.
The decline in profit was attributable to lower year-over-year revenues generated by the company’s automotive operations as well as the financial arm. Total revenue during the quarter ebbed 7% to $32.5 billion. However, excluding revenues from Volvo, sales improved by $1.6 billion or 5% from the fourth quarter of 2009.
However, Ford boasted of a profit of $7.58 billion or $1.91 per share for full year 2010 (before special items), which is a record in more than 10 years led by led by strong performance in North America, reflecting favorable volume, mix and pricing, as well as better performance by Ford Credit.
It compared with a profit of $19 million or one cent per share in 2009. However, the company’s profit failed to meet the Zacks Consensus Estimate of $2.09 per share.
Chrysler’s another rival, General Motors Company (GM), has also forecasted an after-tax profit for the fourth quarter and full year 2010 on reporting its financial results in weeks ahead. GM faced bankruptcy about the same time as Chrysler. It has reported profits in the first three quarters of 2010.
FORD MOTOR CO (F): Free Stock Analysis Report
FIAT SPA (FIATY): Free Stock Analysis Report
Zacks Investment Research
