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WHEN A 3RD QUARTER OPERATING PROFIT IS REALLY A LOSS

This article is from our archives and has not been updated and integrated with our "new" site yet... Even so, it's still awesome - so keep reading!

Published on Mon, Nov 8, 2010

By: The LACar Editorial Staff

2011 Jeep Grand Cherokee
Jeep’s new Grand Cherokee makes a splash on Chrysler’s bottom line.

Chrysler reports its third quarter loss, er uh, operating profit Dear LA Car, When you post news of Chrysler's 3rd quarter earnings, I hope you'll write or choose a story that says the company reported a loss because that's the fact. The Chrysler news release says the company reported a $239 million operating profit. That's the headline in the Detroit Free Press. But an operating profit is the result before interest and taxes are subtracted. Chrysler's taxes may be low ... I don't know ... but interest expense is a real cost ... paying for capital is no different from paying for steel. The Wall Street Jounal headline is "Chrysler Reports Loss," and the Detroit News headline is "Chrysler cuts losses in Q3," so those two publications are offering more accurate, and more honest, news coverage. I hope LA Car will be onboard with the more honest approach. Cordially, BT Justice

2011 Jeep Grand Cherokee

And here’s Chrysler’s press release, in the raw. Form your own opinion: Chrysler Group LLC Reports Operating Profit of $239 Million for the Period Ended September 30, 2010; Company Revises Guidance Upward for Full Year 2010 • Net Revenues increased to $11.0 billion in Q3 2010, up 5.2 percent from Q2, and Net Loss reduced to $84 million from $172 million in Q2 2010 • Positive Cash Flow of $419 million in third quarter, further strengthening Cash Position to $8.3 billion as of September 30, 2010 • Based on continued operating performance improvement, full year guidance is revised upwards to an Operating Profit of ~$0.7 billion (from $0.0-0.2 billion), Positive Free Cash Flow of ~$0.5 billion (from negative $1 billion) November 8, 2010 , Auburn Hills, Mich. - Chrysler Group LLC today issued its financial results for the third quarter 2010 and revised upwards its full year 2010 guidance based on continued operating performance improvements. Sergio Marchionne, Chief Executive Officer of Chrysler Group LLC stated, "A year ago, Chrysler Group laid out clear and concise five year financial goals and after three consecutive quarters of better than forecasted results, we are not only living up to our commitments but we are also exceeding our 2010 financial objectives. “Chrysler’s financial success is dependent upon the vehicles we design, build and sell. In a mere 16 months, the Company is delivering 16 all-new or refreshed products led by the critically acclaimed all-new 2011 Jeep Grand Cherokee and including the Fiat 500, signaling the return of the Fiat brand to the U.S. and Canada. We are committed to ensuring that every new vehicle this company launches has the same high quality and technological advances as the Jeep Grand Cherokee. Our 2010 accomplishments are just the beginning of building Chrysler Group into a vibrant and competitive auto maker,” Marchionne added.

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