Chrysler Profit Growth Slows Due to Costs
After posting strong profit growth quarter after quarter for much of the last two years, Chrysler saw earnings growth slow last quarter.
The lower profit was expected as Chrysler shipped fewer vehicles, handled higher costs due to the launch of new models, and saw its mix of sales shift more toward less profitable cars.
Chrysler 1Q Results
- Modified Operating Profit $435 Million ($740 Million Last year)
- Net income $166 Million ($473 Million last year)
- Revenue $15.38 Billion ($16.35 Billion last year)
Higher Costs Despite Growing Sales
While Chrysler sales increased 7.6 percent in the first quarter and outpaced the industry growth rate of 6.4 percent, the automaker faced higher costs that weighed on the bottom line. As the company ramps up for production of the redesigned Jeep Cherokee in the second quarter and Ram Heavy Duty Trucks later this year, it is dealing with higher costs.
(Read More: Chrysler's Future According to Marchionne)
At the same time the company is seeing its mix of vehicles being sold shifting more towards cars, which are less profitable.
Still, Sergio Marchionne, Fiat Chrysler CEO, said the company remains on track to ship between 2.6 and 2.7 million vehicles worldwide this year.
Chrysler also reconfirmed the company is on track to earn $2.2 Billion this year.
(Read More:'Microcars': Tiny, Collectible Marvels of Design)