Could Chrysler -- poor forgotten, doomed Chrysler -- actually be making money?

America's No. 3 automaker is expected to issue its first post-bankruptcy financial report soon, and I don't know anyone expecting anything other than a sea of red ink. Sales of Chrysler's aging product line have been sliding steadily, even as key rivals like Ford (NYSE: F) and Honda (NYSE: HMC) pile up impressive gains in markets around the world. Most observers believe the company is treading water, hoping to stay afloat under Fiat's wing until it can begin to deliver new and refreshed products at the end of the year.

But the business media last Friday made much of a report by an analyst at Bernstein Research in London. Among other things, the report claimed that Chrysler made an "astonishing" profit in March and nearly broke even for the first quarter.

Of course, those "other things" the analyst pointed out were a little less rosy.

The bad news is a little more dramatic
Most observers assume that Chrysler's financial situation is dire -- sales certainly have been -- but the truth is, nobody outside the company really knows. Chrysler hasn't published a financial statement since its divorce from Daimler (NYSE: DAI) in 2007. The report from analyst Max Warburton paints a mixed picture:

  • Cost-cutting efforts by Fiat CEO Sergio Marchionne's team have reportedly yielded surprising results. One would think Chrysler's costs had been cut to the bone (and then some) by prior owners, but apparently not. Warburton's report says that fixed-cost savings are being found "again and again," so many that the company came "surprisingly close to breakeven" in the first quarter.
  • Chrysler made a profit in March, Warburton maintains, despite sales that were down 8.3% from economic-doom-is-imminent levels a year earlier. Don't get too excited, though: Pointing out the obvious, the report emphasizes that Chrysler faces "massive challenges" going forward.
  • But: Warburton is skeptical of the Dodge and Chrysler brands' futures, saying that elimination of everything except the Ram truck line, Jeep, and a North American manufacturing base for Fiat may be "a realistic exit strategy".

Taken together, its troubling stuff for anyone hoping for another Chrysler renaissance. But really, we've this story heard before.

Oh look, Chrysler's doomed again
The tale of Chrysler's imminent demise is an old one. Since my earliest days following the auto business as a kid in the 1970s, the consensus opinion on Chrysler at nearly any given moment has followed one of two outlines: Either the company was in the midst of another amazing renaissance, or it was about to go bust.

Autos are a classic example of a cyclical industry, but Chrysler -- as the smallest of the once-Big Three -- always seemed to hit higher highs and lower lows than crosstown rivals General Motors and Ford. That made its stock intriguing back when it was a stand-alone public company, but since "merging" with Daimler in 1998, Chrysler's story has had few of those breathtaking highs -- and ever-lower lows.

Later efforts by Cerberus, the private-equity firm that bought Chrysler from Daimler for a pittance in 2007, were too little, too late. Even with former Toyota (NYSE: TM) star Jim Press in the executive suite, there wasn't enough left of the old Chrysler magic to keep the company afloat in the face of a rapidly worsening economy.

And then came bankruptcy, as we all know, and the arranged marriage to Fiat. And now? Marchionne will unveil his five-year plan for all of Fiat on Wednesday in Turin, and he's expected to provide some of Chrysler's 2009 financials at that time. If there really is an upside surprise on the way, we'll know shortly.

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Fool contributor John Rosevear admits to having a soft spot for certain old Chrysler products. He owns shares of Ford. Ford is a Motley Fool Stock Advisor choice. You can try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a Hemi-powered disclosure policy.