Chrysler Profit Climbs 16% But Outlook Sinks

Chrysler Group LLC's net earnings rose to $507 million (€382 million) in the second quarter of this year from $436 million (€328 million) in the same period of 2012.

But Chrysler trimmed its full-year forecast to a net profit ranging from $1.7 billion to $2.2 billion (€1.3 billion-€1.7 billion) from its earlier prediction of $2.2 billion. The company cites recall costs and multiple delays in new-model launches.

Quarterly revenue increased 7% to $18 billion (€13.6 billion). Global vehicle sales jumped 10% to 643,000 units.

Modified operating profit rose 7% to $808 million (€609 million) in the April-June period. The company says higher wholesale deliveries and improved pricing were partly offset by the expense of launching new models and a $151 million charge (€114 million) for the recall of 1.6 million Jeeps in the quarter.

Chrysler says it lost production volume of existing vehicles on a "steady basis" in the first half because of parts shortages. The company still expects to meet its full-year goal of shipping 2.6 million vehicles by building and selling 150,000 more vehicles from July through December than it did in the previous six months.

Chrysler generated $91 million (€69 million) in free cash flow during the quarter and held $11.9 billion (€9 billion) in cash on June 30. The company's automotive debt reached $656 million (€494 million), up 6% from March 31 and 52% from a year earlier.