Updated October 29, 2012, 1:25 p.m. ET

Chrysler Quarterly Profit Soars

By CHRISTINA ROGERS
Chrysler Group LLC reported a 80% jump in its third-quarter profit over a year ago amid strong demand for its cars and pickup trucks and a continuing recovery in the U.S. auto market.

The Auburn Hills, Mich.-based auto maker said it earned $381 million, up from a profit of $212 million for the same period last year. Revenue climbed 18% to $15.5 billion in the quarter ended Sept. 30.

A 12% increase in the number of vehicles sold world-wide helped drive Chrysler's improved performance. The Auburn Hills-based auto maker sold 556,000 cars and trucks globally in the quarter ending Sept. 30, up from 496,000 in the same period a year ago.

"We've changed the conversation at Chrysler Group," Sergio Marchionne, chief executive of Chrysler and majority-owner Fiat SpA said in a statement on Monday. "We continue to work feverishly and are pleased to see that our all-consuming aspiration for excellence is translating into results."

Chrysler confirmed its full-year guidance of $1.5 billion net income for 2012, and expects free cash flow to be well in excess of $1 billion.

The company sells most its vehicles in the U.S. market which is helping to buffer it from the slowdown in Europe that is hitting Italy's Fiat.

On Tuesday, Mr. Marchionne is expected to revise sales and other forecasts for Fiat, as well as provide details on measures to cut Fiat's cost and excess plant capacity in Europe. It's unclear at this point how the update might affect Chrysler's plans moving forward.

Due to Fiat's troubles in Europe, Chrysler has since become the financial engine for the Fiat-Chrysler partnership. The U.S. continues to be Chrysler's most important and profitable market. For the first three quarters of the year, Chrysler has earned $1.29 billion.

Since exiting bankruptcy in 2009, the auto maker has surprised many with the pace of its recovery. Chrysler's U.S. sales have climbed 22.3% so far this year, outpacing the industry's growth of 14.5%. Market share for the third-quarter was 11.3%, up from 8.9% at the end of 2009.

Under Mr. Marchionne, Chrysler has sought to increase sales internationally, using Fiat's dealer network in Europe and South America. He also is using Fiat's small-car designs and engine technology to expand Chrysler's line of fuel-efficient vehicles. The Dodge Dart compact, the first car produced by this partnership, went on sale in June.

In turn, Fiat would also get vehicles from Chrysler, mostly sport-utility vehicles and larger cars that it could sell in Europe and other parts of the world.

Fiat's slowdown in Europe, however, has added some strain to Mr. Marchionne's drive to merge the two companies into a single, global auto maker.

Together, the two companies hope to sell 6 million vehicles globally by 2014, up from 4.1 million cars and trucks Fiat and Chrysler sold last year.

Fiat also is working to increase its stake in Chrysler, which now stands at 58.5%. A health care trust set up by the United Auto Workers union to pay for retiree medical cost owns the remaining 41.5% stake. Without at least 80% ownership in Chrysler, Fiat can't touch Chrysler's cash.

Chrysler Quarterly Sales, Profit Soar - WSJ.com