Chrysler Group LLC posted a second-quarter net loss on Monday and said it still had an extraordinary amount of work to complete, but its turnaround was on track and it could raise its financial outlook later this year.
Chrysler, which emerged from a U.S.-government supported bankruptcy in June 2009 under the management control of Italy's Fiat SpA
The automaker left intact its 2010 forecast, including a minimum of break-even an operating basis, but said it was highly probable it would be raised when it announces third-quarter results.
The No. 3 U.S. automaker said its net loss had narrowed to $172 million in the second quarter from $197 million in the first quarter. The year-earlier quarter included only a few weeks of the new Chrysler and is not comparable.
Net revenue rose 8.2 percent to $10.5 billion in the second quarter from the first three months of 2010.
Operating profit rose $40 million from the first quarter to $183 million.
The increase in the operating profit for the second quarter over the first three months of 2010 came mainly from production increases and was met by pressure from moderate incentives increases and vehicle introduction costs, Chrysler said.
Chrysler Chief Executive Sergio Marchionne said the results confirmed that Chrysler was on track to achieve its goals, yet an extraordinary amount of work still lies ahead.
Chrysler said it had $7.8 billion in cash at the end of the second quarter and total available liquidity stood at more than $10 billion when including an available $2.3 billion of U.S., Canada and Ontario government loans.
The automaker has had a dearth of new vehicles since it emerged from bankruptcy, but began production on a redesigned Jeep Grand Cherokee in the second quarter. President Barack Obama in July toured the plant where it is built.
Chrysler slashed product development to save cash during its downturn that led to the bankruptcy, leaving its product lineup soft in business that relies on continuously refreshed models to drive retail sales.
Chrysler Group must continue to be rigorous, disciplined and focused on the task at hand, Marchionne said in a statement.
Chrysler expects 2010 net revenue of $40 billion to $45 billion for the year. It expects negative cash flow of $1 billion in 2010.
(Reporting by David Bailey and Bernie Woodall; Editing by Lisa Von Ahn and Maureen Bavdek)