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General Motors Company (GM), Ford Motor Company (F): Does Chrysler Really Think We’ll Give It Another Chance?

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General Motors (GM)This year has started off pretty well for Detroit’s Big Three automakers — for the most part. Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) have enjoyed surges in market share and sales while beating Wall Street estimates with their first-quarter numbers. But the story hasn’t been quite as bright yet for Detroit’s third automaker, Chrysler. Recently there’s been chatter that Fiat might purchase the remaining shares of Chrysler and consider taking it public again. That would give investors another chance to trade their cash for Chrysler shares. If that does take place, here are some numbers you need to know and a red flag to consider.

First-quarter numbers
As the company forewarned, the numbers for Chrysler’s first quarter looked pretty ugly compared with its crosstown rivals. Chrysler’s net income sank to $166 million from $473 million a year ago — a 65% decline. Net revenue also declined to $15.4 billion from $16.4 billion a year ago. It wasn’t all bad news, though, as cash on hand improved and net industrial debt decreased. Chrysler also grabbed some market share — albeit less than rivals Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) — improving from 11.2% a year ago to 11.4%.

Results were affected by a decline in vehicle shipments, but costs incurred for Chrysler to launch two of its most important vehicles — the Dodge Ram pickup and Jeep Cherokee — also played a part. Success with both of those models is vital if Chrysler is going to post better profits later this year.

Mike Manley, president and CEO of Jeep and COO for Chrysler’s Asia-Pacific region, unveils the latest Jeep Cherokee at the 2013 Shanghai Auto Show. Source: Chrysler Group Media.

However, if Chrysler decides go public again, it would probably combine itself with Fiat for the IPO.

Red flags
Fiat’s numbers for the first quarter came in lower partially because of the poor earnings at Chrysler. Its overall trading profit (pre-tax income) fell 23% to $805 million dollars. For comparison’s sake, that wasn’t even half of Ford’s $2.1 billion first quarter pre-tax income.

“This is a one-time event. It’s a one-off,” CEO Sergio Marchionne said. “Just close your eyes, plug your nose, and move on from here. I knew I was going to be limping in the quarter. I didn’t know that I was going to be limping that much.”

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