Fiat Chrysler raises earnings forecasts again

AP News
Posted: Oct 25, 2016 11:13 AM

MILAN (AP) — Fiat Chrysler Automobiles on Tuesday increased its 2016 earnings forecast for the second time this year after strong results in North America helped it return to a profit in the third quarter.

The company reported an adjusted net profit of 606 million euros ($659 million), compared with a loss of 387 million euros in the same period last year. Revenues were flat at 26.8 billion euros, with deliveries down marginally to 1.12 million units.

The group raised its profit forecasts for this year to above 2.3 billion euros from above 2 billion euros, while confirming net revenues of above 112 billion euros.

Shares in the automaker rose 0.5 percent to 5.92 euros in Milan trading.

North America accounted for two-thirds of revenues and 85 percent of the profit in the third quarter, notwithstanding an 8 percent decrease in shipments as the carmaker realigns its product offer in favor of Jeep and Ram.

Shipments in the United states were down 45,000 units, mostly reflecting reductions to production of the Chrysler 200 and Dodge Dart. CEO Sergio Marchionne told an analyst conference call that the production lulls wouldn't be fully offset by the transition to SUVs and trucks until 2018.

Results in Europe and Asia and for luxury brand Maserati showed improvements.

The launch of the Maserati Levante SUV helped boost the luxury brand's profits to 103 million euros from just 12 million euros in the same quarter last year. The profit margin rose from 2.3 percent to 11.8 percent in the period. Fiat Chrysler shipped 5,000 Levantes in the third quarter and has taken 18,000 orders worldwide, Chief Financial Officer Richard Palmer told analysts.

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In Europe, volumes rose 18 percent to 295,000 vehicles, boosting revenues 10 percent to over 5 billion euros. Group sales in Asia were up 27 percent to 61,000 units, giving a 2-percent nudge to revenues of 861 million euros.

Latin America continued to be penalized by a weak market in Brazil, with a 17 percent drop in sales volumes leading to a 2 percent decline in revenue, to 1.5 billion euros.