DETROIT -- Chrysler Group -- the U.S. automaker that has survived two ownership changes and a U.S. bailout in the past four years -- today reported its first net profit since emerging from bankruptcy in June 2009.
Chrysler posted net income of $116 million for the first quarter, compared with a net loss of $197 million a year earlier. Revenue jumped 35 percent to $13.1 billion as global vehicle sales increased 18 percent.
Cash rose to $9.9 billion on March 31 from $7.3 billion three months earlier.
Analysts at Morgan Stanley & Co., in a report issued this morning, called the results "impressive" and noted Chrysler exceeded Wall Street expectations "on all levels."
Chrysler also said it generated free cash flow of $2.5 billion -- up from $1.6 billion during the same quarter last year. Morgan Stanley called that result "the key positive surprise for us, leaving net debt at only $3.4 billion."
Marchionne said the financial news shows Chrysler's rejuvenated product lineup is getting traction in the market.
"We are making progress," he said in a conference call this morning. But he said Chrysler has much work to do. "Success is incredibly temporary. We've got a lot of quarters to do." But "the house needed to hear it. We did good this morning."
Chrysler posted a profit even though it is still scrambling to get some of its newest vehicles to dealers in sufficient quantities. Marchionne acknowledged that dealers still don't have enough of key vehicles like the 2011 Chrysler 200 and 300 sedans.
"These product launches were hitting the market as we come out of Q1. We need to fill the pipeline to sell them. There are less than two Chrysler 200s per dealer. It's inadequate. We need to get product on the ground."
He also acknowledged Fiat is behind schedule in getting its dealer U.S. network open. As of today, 56 of Fiat's 130-planned dealerships are open with more opening every week.
"This has nothing to do with the dealer body. It has to do with getting a license to operate on facilities. We're working very hard with the dealer body to get representation in the field as quickly as we can. The product has achieved the right level of recognition and appreciation. We need to get the right level of distribution."
The profit punctuates the ongoing reconstruction of Chrysler by Italy's Fiat S.p.A., which took management control as part of the U.S. government bailout two years ago.
Chrysler had been steered by private equity firm Cerberus Capital Management, which acquired 80 percent of the U.S. automaker from Daimler AG in May 2007 for $7.45 billion.
Today's profit announcement marks the second financial milestone reached by Chrysler within a week. On April 28, Chrysler said it intends to repay its U.S. and Canadian rescue loans this quarter via a new term loan and debt offering.
Marchionne has said that high interest rates, up to 14 percent on U.S. loans and 20 percent on Canadian loans, kept Chrysler from reporting a profit in 2010. Chrysler owes the U.S. government $5.8 billion and the Canadian government $1.7 billion.
Repaying the loans would allow Fiat to exercise a call option to increase its ownership stake in Chrysler to 51 percent, a level Fiat hopes to achieve in the fourth quarter.
On April 12, Fiat boosted its stake in Chrysler to 30 percent, the second of three 5 percentage point additions allowed under terms of the bailout. The latest milestone was triggered after Chrysler achieved $1.5 billion in revenue from sales outside the United States, Canada and Mexico.
Under Fiat management, Chrysler revived its lineup by introducing 16 new- or heavily revamped vehicles in 2011. Chrysler's U.S. market share increased to 9.2 percent in the first quarter, up from 9.1 percent a year earlier.
Chrysler's overall U.S. vehicle sales rose 23 percent in a market that improved 20 percent. In March, Chrysler sales rose 31 percent. April results are scheduled for release on Tuesday.
Sales of Dodge-brand cars made up about 37 percent of Chrysler's sales in the first quarter, while the Jeep brand made up about 30 percent.
In the United States, the company's top-selling vehicles in the first quarter were its Ram pickup truck, the Grand Cherokee and the Chrysler 200 sedan. In Canada, top sellers were the Dodge Journey crossover, Grand Caravan minivan and Ram pickup.
Meanwhile, sales of Chrysler-brand cars fell 14 percent, despite renewed buzz for the flagship brand with a Super Bowl ad, bearing the tagline "Imported from Detroit."
The figures underscore a key challenge for Chrysler: a lineup that skews toward larger vehicles -- risky at a time when fuel prices are jumping above $4 a gallon.
But crossovers -- or smaller sport-utility vehicles built on car-based platforms-- remain the dominant segment in auto sales and an area where Chrysler has made inroads with vehicles like its Dodge Durango, IHS analyst Rebecca Lindland said.
"They can make money with this configuration and it works for them," Lindland said. "We do have to watch them for fuel economy standards. They'll be heavily dependent on Fiat to provide some balance."
Chrysler executives said they were aiming for a 25 percent improvement in fuel economy in its fleet by 2014 and would shift toward four-cylinder gasoline engines and away from six- and eight-cylinder engines.
The company will begin production of a car that can get 40 miles per gallon in the fourth quarter, Marchionne said.
In a separate announcement, Chrysler said today that it would borrow $3.5 billion in a senior secured six-year term loan and $2.5 billion in secured bonds that will have eight- and 10-year maturities.
Chrysler plans to use the term loan, bonds and $1.27 billion in cash from Fiat to refinance its government loans during the second quarter.
The company also confirmed plans to secure a $1.5 billion five-year revolving credit facility, as sources previously told Reuters.
A refinancing deal would bolster Chrysler's balance sheet, making it more attractive for an initial public stock offering. The deal also paves the way for Fiat to take majority control of the U.S. automaker.
Editor's note: an earlier headline on this story contained the incorrect first-quarter revenue figure. The correct revenue was $13.1 billion.
Reuters contributed to this report.