Chrysler reports quarterly loss of $690 million on merger costs

(May 12, 2014) AUBURN HILLS, Mich. — Chrysler Group reported a net loss of $690 million in the first quarter as it paid costs associated with its completed merger with Fiat. Without the two unusual charges associated with its merger, profit was $486 million, Chrysler said in a report today. A year earlier, Chrysler posted a net profit of $166 million.

Infrequent items of $1.2 billion in the first quarter including a $504 million loss on the elimination of debt related to the prepayment of its note with the UAW Retiree Health Care Trust. It also took a $672 million charge for commitments it made in the New Year’s Day transaction that allowed Fiat S.p.A. to purchase the UAW VEBA’s remaining shares of Chrysler.

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.