DETROIT -- Chrysler Group, helped by new models and higher sales, swung to a third quarter net profit of $212 million, compared with a net loss of $84 million a year earlier.
Revenue rose 19 percent to $13.1 billion, driven by demand for 16 new or refreshed vehicles Chrysler has introduced for the 2011 and 2012 model years.
Chrysler also raised its earnings outlook and now expects to generate adjusted net income of $600 million for all of 2011, up from previous estimates of $200 million to $500 million.
Detroit's smallest automaker has lost $42 million on revenue of $40 billion through the first three quarters of 2011.
Chrysler is on track to post its first annual net profit since 2005 and just over two years after its U.S.-steered bankruptcy and rescue by Italy's Fiat S.p.A.
Chrysler said it also expects to generate $1.2 billion in cash flow this year, up from prior guidance of $1 billion.
The company ended the quarter with $9.5 billion in cash, down from $10.2 billion at the end of the second quarter but up by $1.2 billion from a year ago.
The earnings results came a day after the UAW narrowly ratified a new four-year labor agreement with the automaker.
"Chrysler Group achieved increased sales and positive financial results, totally in line with the plan we laid out in November 2009," CEO Sergio Marchionne said in a statement.
"And in October, together with the United Auto Workers, we crafted a solid four-year contract that will support us in our growth plans and significantly reward our employees for their contribution to the revival of Chrysler.
"This house continues to be fully focused on financial performance and making outstanding cars and trucks by fully leveraging its alliance with Fiat."
Chrysler's global sales were 496,000 for the third quarter, up 24 percent from a year earlier. In the U.S., Chrysler sales are up 23 percent this year – outpacing the overall light vehicle market's 10 percent increase.
The all-new 2011 Chrysler 300 and Dodge Charger sedans arrived in the summer and had a short 2011 model run. Dealers say availability of both large sedans has now improved.
The company also improved the 2012 versions of the large sedans, which are on sale now. The biggest change for 2012 is the addition of an eight-speed automatic transmission.
Chrysler suffered from a shortage of its new Pentastar V-6 engine during the third quarter, forcing the automaker to trim production of key vehicles including the Chrysler Town & Country and Dodge Grand Caravan minivans.
The company underestimated demand for the engine, which replaces seven V-6 engines. Chrysler produces the Pentastar engine at plants in Trenton, Mich., and Saltillo, Mexico.
The automaker's U.S. market share has climbed to 10.6 percent through the third quarter, up from 9.5 percent at the end of September 2010.
Chrysler's performance also boosted Fiat's overall results.
Fiat's third-quarter earnings before interest, taxes and one-time items, which Fiat calls trading profit, rose to 851 million euros ($1.21 billion) from 256 million euros a year earlier, the carmaker said in a statement today. Profit beat the 696 million-euro average estimate of eight analysts.
This was the first full quarter of Fiat results including Chrysler figures.
After several painful years of restructuring, Detroit automakers are now making money at much lower industry sales volumes.
U.S. light vehicle sales dropped to 10.4 million units in 2009 and are steadily recovering but remain below the peak of 17.4 million units in 2000. They are forecast to hit 12.6 million to almost 13 million units for 2011.
Ford has earned $6.6 billion this year through the third quarter. GM, which also survived a 2009 bankruptcy, generated net income of $5.9 billion through the first two quarters and is scheduled to report third-quarter financial results on Nov. 9.
Bloomberg contributed to this report.