* Chrysler 2nd-quarter revenue rises 23 percent
* Worldwide vehicle sales up 20 percent
* Marchionne to employees: stay humble
* Dodge Dart rolling out to dealers now
DETROIT, July 30 (Reuters) - Chrysler Group LLC continued
its turnaround from near death just three years ago, earning
$436 million in the second quarter and confirming that it will
show a full-year operating profit of at least $3 billion.
Chief Executive Sergio Marchionne, in an email to Chrysler's
employees on Monday, warned against overconfidence in the face
of the company's recent success after "living through a
near-death experience" in 2009.
"History teaches that it is easy to develop bad habits
during good times," wrote Marchionne, who is also CEO of
Chrysler's majority-owner Fiat SpA.
"This is no time to cut corners, no time to become
undisciplined in our execution, no time to forget how difficult
it was to claw our way back to viability," said the email, a
copy of which was obtained by Reuters.
A year ago, Chrysler lost $370 million in the second
quarter, including losses related to $551 million in payments of
government loans related to its 2009 bankruptcy and bailout.
Second-quarter revenue rose 23 percent to $16.795 billion.
Rebecca Lindland, analyst with IHS Global Insight, said the
fact that Chrysler had $12.075 billion in cash at the end of the
quarter emphasizes the vast improvement of the company since
2009.
"They are not burning through cash anymore," Lindland said.
"It shows that from an operating and structural standpoint, they
really have made some significant systemic improvements. The
changes they have made can lead to long-term improvement in the
company."
Fiat reports second-quarter earnings on Tuesday. In the past
several quarters, its weak earnings have been boosted by the
strength of Chrysler. Marchionne will elaborate on Chrysler's
earnings during a Tuesday conference call with reporters and
investors.
Fiat's earnings have been pressured by the economic crisis
in Europe. Also, it relies heavily on southern European markets
where sales have been hit the hardest.
Chrysler's global vehicle sales rose 20 percent, to 582,000
in the second quarter, led by a 24 percent rise in U.S. sales.
Sales outside its core market in North America rose 58 percent
to 70,000 vehicles in the quarter.
Earlier this month, Fiat announced its intention to exercise
its call option to purchase another 3.3 percentage points of
Chrysler, raising its stake to 61.8 percent once that deal has
been done. Neither Fiat nor Chrysler have yet indicated that the
deal has been sealed.
The remaining shares of Chrysler are owned by a retirees'
healthcare trust administered by the United Auto Workers union.
Earlier this month, Marchionne said of the full-year
operating profit: "The objective of $3 billion is close at hand.
We could overshoot it."
Sales have steadily climbed for Chrysler since the first
quarter of 2010, when it began breaking out its financial
results from Fiat. At that time, Chrysler's revenue was $9.69
billion.
Through June, Chrysler has reported 27 consecutive months of
year-on-year sales growth in the U.S. market. That streak
followed about 24 consecutive months of U.S. sales decreases.
Marchionne and his leadership team are credited with
overhauling Chrysler's vehicle lineup which was outdated and
panned in quality surveys and reviews when Fiat took management
control in 2009.
Chrysler is now ramping up sales for its new Dodge Dart
small sedan which competes in the compact segment of the U.S.
auto market -- a crowded segment that includes Honda Motor Co's
Civic, Toyota Motor Corp's Corolla, Ford Motor
Co's Focus and General Motors Co's Chevrolet Cruze.
The Dart is the first vehicle to be jointly developed by
Fiat and Chrysler.
Fiat took management control and a 20 percent ownership
stake in Chrysler as part of the bankruptcy restructuring in
2009 that saved the Auburn Hills, Michigan, automaker from
extinction.
Chrysler's cash at the end of the second quarter increased
to $12.075 billion from $10.175 billion a year ago and from
$11.3 billion at the end of the first quarter. Total available
liquidity at the end of the second quarter was $13.4 billion.
Free cash flow was $866 million at the end of the second
quarter, down from $1.7 billion at the end of the first quarter,
and up from $174 million a year ago.