FCA CEO Sergio Marchionne revised the company's full-year guidance on the strength of the third-quarter results.
Fiat Chrysler Automobiles N.V. raised its guidance after the company reversed the loss it sustained during the same period a year ago even though revenues and unit sales were essentially flat during the July-September period.
Fiat’s group adjusted earnings before earnings before interest and taxes increased in the third quarter of 2016, jumped 29% to $1.62 billion while the group’s margins increased to 5.9%. Net income also increased to $653 million compared with a loss of $387 million in the third quarter of 2015.
For the full year, the FCA raised its guidance for adjusted EBIT to $5.94 billion and adjusted net profit raised to $2.5 billion from $2.3 billion.
Worldwide combined shipments of 1.2 billion units were substantially flat despite a 3% increase in sales Jeep-brand vehicles, which are on their way to another record. Net revenues were also was flat, according to the company’s third quarter financial statement.
(GM posts outstanding 3Q financial results. To get details, Click Here.)
The record third quarter earnings were driven by the continued strong performance in NAFTA where margins grew as well as by improvement in Asia Pacific and the Maserati brand, which pushed its margins into double digits. FCA also acknowledged losing money in Latin America, traditionally one of the company’s strong markets, but said it was at nearly break-even with the ongoing difficult market conditions.
Jeep sales continue to grow around the world, helping FCA to improved earnings results.
Net industrial debt increased $1.08 billion from June 2016 mainly due to normal working capital seasonality. while liquidity is of $24 billion.
Sergio Marchionne said during a conference call that he was optimistic about reducing Fiat’s debt $5.43 billion by the end of this year, due with cost cutting and operational improvements since the company was unlikely to make any asset sales this year.
(Strong sales also boost Daimler’s bottom line. Click Here for more.)
“There is nearly 100% certainty that no (sales) deal will happen in the fourth quarter of this year,” Marchionne told analysts on a post-results conference call.
FCA’s components businesses Magneti Marelli and Comau have attracted interest from various bidders in Korea and China.
However, Marchionne said FCA’s failure to keep up with GM and Ford on profitability in North America remained “the single largest shortcoming that this group has against a competitor class,” but vowed to change that by 2018.
(To see more about Fiat finishing last on Consumer Reports brand list, Click Here.)
FCA reported strong earnings growth in Europe in the third quarter, and profits also jumped at luxury brand Maserati, helped by the launch of the Levante, its first SUV.