Chrysler Group LLC's quarterly profit fell 65 percent as it absorbed the costs of new-vehicle launches, the company said on Monday.

The No. 3 U.S. automaker also reaffirmed its financial forecasts for 2013, including net income of about $2.2 billion.

"We remain on track to achieve our business targets, even as the first-quarter results were affected by an aggressive product launch schedule," said Sergio Marchionne, chief executive officer of Chrysler as well as of its parent, Fiat SpA .

Fiat is to release its first-quarter earnings later Monday morning.

Net income in the first quarter fell to $166 million from $473 million a year before.

Net revenue fell 6 percent to $15.4 billion in the quarter.

Chrysler also said it still expects 2013 net revenue of $72 billion to $75 billion, boosted by a strong second half. It also said it sees free cash flow of more than or equal to $1 billion.

Marchionne in January warned that Chrysler's first-quarter earnings would be weaker than the previous year because of the expense of product launches and the fact that the Jeep Liberty SUV was no longer being produced.

The Liberty's successor, the Jeep Cherokee, was not sold in the first quarter.

Marchionne said earlier this month that there was a 50 percent chance that the Fiat buyout of Chrysler would be completed by June 2014.

If Fiat, which now owns 58.5 percent of Chrysler, buys and then merges with Chrysler, it would create the world's seventh-largest automaker.

As it has in recent quarters, Chrysler's profit was expected to keep its parent Fiat from losing money in the first quarter as the European auto market outlook remains bleak.

(Reporting by Bernie Woodall; Editing by Gerald E. McCormick and Maureen Bavdek)