July 30 (Bloomberg) -- Chrysler Group LLC, the automaker controlled by Fiat SpA, reported second-quarter net income of $436 million as the company plans to extend gains in passenger- car sales with the new Dodge Dart compact.
The profit for the three months ended June 30 compared with a year-earlier loss of $370 million, the Auburn Hills, Michigan- based company said today in an e-mailed statement. Chrysler’s second-quarter 2011 results included a one-time $551 million cost for repaying government loans. Sales increased 23 percent to $16.8 billion.
Chrysler affirmed its forecast that net income will rise to about $1.5 billion this year, buoying results for its Turin, Italy-based majority owner as Europe’s debt crisis sends sales in the region to a fifth-consecutive drop. Chrysler’s U.S. sales of passenger cars surged 42 percent during the second quarter from a year earlier, driven by demand for 200 and 300 sedans, according to researcher Autodata Corp.
“Chrysler really has hit the ball out of the park here in the first half gaining additional market share in the U.S.,” Richard Hilgert, a Chicago-based analyst for Morningstar Equity Research, said in a telephone interview before the results were released. Chrysler’s car sales gains probably will continue in the second half because of the new Dodge Dart compact, which will reach full inventory at dealers by September, he said.
Chrysler reported it had $12.1 billion in cash at the end of the quarter, up from $11.3 billion as of March 31. Net industrial debt dropped to $432 million from $1.3 billion at the end of the first quarter.
Sergio Marchionne, chief executive officer of both Chrysler and Fiat, plans to merge the two companies and boost sales to more than 100 billion euros ($123 billion) by 2014. Fiat will boost its ownership stake of Chrysler to 61.8 percent by exercising an option to buy an additional 3.3 percent from the United Auto Workers’ retiree health-care trust, or VEBA, the company said in a July 3 statement.
Chrysler Group’s total U.S. sales rose 30 percent from a year earlier to 834,068 cars and light trucks during the first half, according to Woodcliff Lake, New Jersey-based Autodata. Sales of the Chrysler brand’s 200 more than doubled and 300 sedans almost tripled in the first half from a year earlier.
The company topped the industry’s 15 percent increase, boosted by demand for redesigned or refreshed models such as the Jeep Grand Cherokee sport-utility vehicle. Chrysler’s U.S. market share rose 1.4 percentage points from a year earlier to 11.5 percent, Autodata said.
Fiat may report tomorrow that earnings before interest, taxes and one-time items, which it calls trading profit, will rise 82 percent to 957.8 million euros for the second quarter, the average estimate of four analysts surveyed by Bloomberg. Sales probably climbed 61 percent to 21.2 billion euros, the average of 10 estimates.