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Chrysler’s first-quarter net income shrinks

Keywords: Tags  Chrysler, earnings report, Jeep, Ram truck, Sergio Marchionne, new model launches, corinna petry

CHICAGO — Chrysler Group LLC’s first-quarter net income tumbled 64.9 percent from the same period last year, which the automaker blamed on reduced vehicle shipments because of key product launches.

Auburn Hills, Mich.-based Chrysler posted net income of $166 million for the three months ended March 31 vs. $473 million a year earlier on revenue that fell 6 percent to $15.39 billion.

As anticipated, the quarter was negatively affected by lower vehicle shipments as a result of key product launches—the 2013 Ram heavy-duty trucks and the 2014 Jeep Grand Cherokee—which the automaker said will position the company for a strong performance in the second half of 2013.

"We remain on track to achieve our business targets, even as the first-quarter results were affected by an aggressive product launch schedule," chairman and chief executive officer Sergio Marchionne said in an April 29 statement. "This quarter underscores the importance of an unwavering commitment to execute flawless vehicle introductions to reach our full potential. While the task ahead this year is daunting, we remain committed to our overall targets, including a minimum shipment increase of 8 percent."

The company shipped fewer vehicles in North America during the first quarter due to the end of the Jeep Liberty program in 2012 in preparation for new Ram trucks and Jeep models, while international shipments declined due to continued economic weakness in Europe and import restrictions in Latin America.

Worldwide shipments totaled 574,000 vehicles in the first quarter, down 5.4 percent from 607,000 in the same period last year. But worldwide sales of 563,000 vehicles were up 7.6 percent from 523,000 in the same comparison, driven primarily by a 12-percent increase in U.S. retail sales.

Chrysler expects shipments to total between 2.6 million and 2.7 million vehicles this year, generating sales of between $72 billion and $75 billion and net income of about $2.2 billion.

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