AUTOS

Fiat Chrysler raises earnings forecasts again

Colleen Barry The Associated Press
Published Tuesday, October 25, 2016 11:31AM EDT

This undated photo provided by Chrysler shows the 2014 Fiat 500. Fiat has announced that it will be unveiling a new version of its iconic "500" model this summer.(AP /Chrysler)

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MILAN -- 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 per cent to 5.92 euros in Milan trading.

North America accounted for two-thirds of revenues and 85 per cent of the profit in the third quarter, notwithstanding an 8 per cent decrease in shipments as the carmaker realigns its product offer in favour 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 per cent to 11.8 per cent 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.

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

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