The old saying, "It takes money to make money," is probably ringing true in Chrysler's Auburn Hills headquarters right now. The company's 2013 first quarter earnings were lower than a year ago, with the launches of three key products identified as the primary reason why earnings came in lower than last year.
However, the results don't come as a surprise to analysts or industry watchers, as Chrysler has been pedal-to-the-metal on new product introductions lately, the most recent three being trucks and SUVs in the form of the redesigned 2013 Ram HD, the 2014 Jeep Grand Cherokee, and the introduction later this year of the all-new 2014 Jeep Cherokee.
Net income for the first quarter of 2013 fell from $473 million in Q1 2012 to $166 million this year. Net revenue was down only slightly, $15.4 billion versus $16.4 billion. But it wasn't all bad news for Chrysler. Net industrial debt declined to $619 million for the quarter, down from $1.3 billion a year ago. Global sales increased eight percent to 563,000 units, primarily on the strength of a 12 percent increase in U.S. retail sales. U.S. market share also increased from 11.2 from Q1 2012 to 11.4 percent this quarter. The Chrysler Group also gained a point of market share in Canada to make it the first place spot north of the border.
The company says the investments made in these new product launches should help it achieve its 2013 full-year goals of 2.6 to 2.7 million global unit sales, a modified operating profit of $3.8 billion, and annual net income of $2.2 billion.