Chrysler said on Wednesday that it earned $464 million in the third quarter. That was a 22% gain from the $381 million it earned in the third quarter of last year.
That gain came despite major delays in shipping the all-new Jeep Cherokee due to a problem with the model's transmission software. Those delays were expected to hit Chrysler's third-quarter profits hard, but strong demand for the automaker's Ram pickups and its other SUVs was enough to offset the Cherokee's problems.
That's a good result for Chrysler in a difficult situation. But as Motley Fool contributor John Rosevear explains in this video, Chrysler's strong profit is a mixed blessing for majority owner Fiat (NASDAQOTH:FIATY). The Italian automaker needs those profits to offset its own losses, but if the U.S. company is too profitable Chrysler's remaining shares -- which Fiat very much wants to buy -- could get very expensive.
Fool contributor John Rosevear has no position in any stocks mentioned. You can connect with him on Twitter at @jrosevear. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.