Chrysler Revving for an IPO?

American automaker posts stellar Q1 earnings

   

Detroit Big Three automaker Chrysler definitely shifted into high gear for its first quarter.

Profits came to $473 million, up a spectacular 300% from the year-ago period’s $116 million and the company’s best quarter since Q3 1998, when it made $682 million.

If Chrysler can keep up the momentum, the company’s corporate parent, Fiat (PINK:FIATY), could get real serious real fast about spinning Chrysler off through an initial public offering. It would be a great way to generate some cash — something Fiat could use considering its mostly European-based business continues to lag. Those continental woes also have been shared by the other American automakers General Motors (NYSE:GM) and Ford (NYSE:F).

Much of the strength was in the U.S., where Chrysler’s sales shot up almost 40% for the quarter as its market share grew from 9.2% to 11.2% year-over-year. The company also saw positive results in Canada, and sales outside the U.S. boomed by 80%.

Chrysler’s continued strong performance might be enough to get IPO investors interested, but the company might want to consider holding off a little longer. General Motors has mostly struggled since its November 2010 IPO, its shares down 32% since then.

And while automaker stocks in general have had a decent run in 2012, Ford and GM each still remain down around 25% from a year ago, while Japanese automakers Toyota (NYSE:TM) and Honda (NYSE:HMC) have struggled to a respective 4% gain and 4% loss.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/ipo-playbook/chrysler-revving-for-an-ipo/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.