Chrysler Group LLC forecast an operating profit this year, thanks to cost cuts, but chief executive Sergio Marchionne said the automaker had to "fight harder" to revive its image and seize market share.
Chrysler projected a $700 million operating profit for 2010 after stripping out financing costs tied to its government-funded bankruptcy. It previously projected it would break even or earn $200 million on that basis.
Chrysler also pinned its 2010 revenue forecast at around $42 billion, in the middle of its earlier range of $40 billion to $45 billion.
Jesse Toprak, an industry analyst at TrueCar.com, said it was encouraging for Chrysler's longer-term turnaround that the automaker had managed to increase operating profit despite relatively high incentives and fleet sales.
The automaker has said it plans a public offering of shares in the second half of 2011. Chrysler's larger rival, General Motors Co GM.UL, plans to go public later this month.
"They've had a nice trajectory of improvement in their financials, which is good heading into an IPO," Toprak said. "I think the better news is that they have an influx of new cars coming."
Chrysler was on the brink of liquidation in 2009 before a U.S. government-funded bankruptcy slashed its operating costs and gave majority ownership to a union-affiliated trust fund and management control to Fiat SpA (FIA.MI).
The company is introducing 16 new or updated models, including the Fiat 500 subcompact. U.S. dealer inventory is expected to rise in the fourth quarter to support the sales of the new products.
Marchionne said he was encouraged by trends heading into 2011, but said the automaker still had a lot to prove.
"We got a bloody nose on the way into the recession and I'm not sure we got it all back on the way out," Marchionne said during a call with analysts. "So we need to fight harder."
