Chrysler posts Q1 profit, first since 2009

Chrysler earned $116 million in its first quarter, its first profitable period since the company was forced to file for bankruptcy protection in 2009. Revenue grew 35 percent, to $13.1 billion, and sales were up 18 percent globally. Chrysler reported operating profits in each quarter of 2010, but interest payments to the American and Canadian governments, which totaled $1.23 billion for the year, resulted in losses over all. Chrysler lost $652 million last year.

The company has announced plans to refinance the $7.5 billion in government loans still outstanding, significantly reducing its interest payments. Chrysler still owes the U.S. Treasury $5.8 billion and the governments of Canada and Ontario $1.7 billion. The United States and Canada own a combined 10.8 percent of Chrysler, which is expected to have an initial public offering later this year or in early 2012.

On Monday, Chrysler said it would repay the loans by the end of June by selling $2.5 billion in bonds and borrowing from new secured credit facilities totaling $5 billion.

Italy's Fiat bought a 20% stake in Chrysler in 2009, after the US firm emerged from bankruptcy protection. It then increased this first to 25% and then to 30% earlier this year. Last month it increased its shareholding in Chrysler to 46%. Chrysler and Fiat CEO Sergio Marchionne’s ultimate goal is to acquire 51% of Chrysler before issuing public stock.

Chrysler introduced or revamped 16 models in 2010, and it said increased sales of many of them played a role in its first-quarter profit, as market share increased in the United States and Canada, its two largest markets.

Chrysler remains far less profitable than its domestic competitors. Ford earned $6.6 billion last year and $2.55 billion in the first quarter of 2011. Ford’s sold 3.5 times as many cars and trucks as Chrysler last quarter, and its profit was 22 times as much as Chrysler’s.

G.M., which filed for and emerged from bankruptcy a month later than Chrysler, earned $4.7 billion in 2010. It is scheduled to reveal first-quarter results Thursday.