Reaction: Concern over future cash generation, product delays, margins
Chrysler expects to generate revenue of $72 billion to $75 billion this year, and net income of $2.2 billion, helped, in part, by higher Jeep sales.
Chrysler Group's fourth-quarter net income rose 68 percent to $378 million from a year earlier. Full-year profit rose eightfold and may rise 30 percent this year, the company said today.
Revenue for the fourth quarter increased 13 percent to $17.2 billion and adjusted operating profit rose 40 percent to $711 million. Full-year net income rose to $1.67 billion from $183 million.
But Chrysler lowered its free cash flow forecast for 2014 by two-thirds, a setback for majority owner Fiat SpA, which is counting on the U.S company as a source of cash when the companies eventually merge.
For 2014, Chrysler now sees free cash flow of about $1 billion. Under CEO Sergio Marchionne's original 2009 business plan, Chrysler had forecast about $3 billion in free cash flow.
Chrysler projected about $80 billion in 2014 revenue, up from a 2009 forecast of $67.5 billion. The higher sales projection with little-changed profit outlook indicates narrower profit margins.
What analysts have to say about the company's 2012 results and outlook:
"We have been bullish on Chrysler since Fiat took an interest in 2009. This was the first quarter we have been disappointed. Operating profit missed our estimate by 15 percent, despite over-production of 78,000 units. The Dart has disappointed, and 8 products have been delayed by at least a year versus the original plan. Meanwhile competition from both the Japanese and VW will get much tougher in 2013-15. We also stick to our view that Fiat does not currently have sufficient capital to fully buy out Chrysler - an event central to any bull-case on Fiat Auto in our view."
-- Morgan Stanley analyst Stuart Pearson
"They used to think that this could be an up to 8 percent margin business and now they're talking about 6 percent going forward despite a higher revenue base, none of which would make me particularly bullish on the business."
-- Erich Hauser, a London-based analyst with Credit Suisse
"Chrysler concluded a very successful 2012 with a robust fourth quarter performance. The company was the only domestic automaker to gain market share last year and was also able to increase its' average transaction price by nearly $1,000 per car compared to 2011 despite a marginal incentives spending, which helped to improve profitability. Chrysler's limited global exposure was a blessing at a time where especially the European market was a drain on the competition's bottom line."
-- Jesse Toprak, senior analyst at TrueCar.com.
"[Chrysler's] earnings report was pretty strong and is representative of the ongoing recovery in the North American market coupled with the strength of many of the vehicles in Chrysler's lineup, including the recently redesigned Ram 1500, and forthcoming 2500/3500 variants, and the refreshed Jeep Grand Cherokee, among others."
-- Mike Wall, director of automotive analysis at IHS Automotive
David Phillips and Bloomberg contributed to this report