Fiat Chrysler third-quarter earnings rise 13%

October 30, 2018 14:59 CET
UPDATED: Oct 30 15:08 CET – adds details

MILAN — Fiat Chrysler Automobiles reported higher earnings for the third quarter despite losses in Europe and Asia.

Adjusted earnings before interest and tax (EBIT) rose 13 percent to 1.995 billion euros, the company said in a news release Tuesday.

Sales rose 9 percent to 28.77 billion euros.

Net profit in the quarter was down 38 percent, due to a 700 million euro charge for estimated costs related to diesel emissions disputes in the United States. The charge does not represent an agreed settlement nor is an admission of liability, FCA said.

FCA has been in intensive settlement talks with the U.S. Justice Department, California and lawyers for owners after the government sued the company in May 2017 contending it illegally used software that led to excess emissions in 104,000 U.S. diesel vehicles sold since 2014.

FCA confirmed its operating guidance for the full year. However, its forecast for net cash was reduced to between 1.5 billion to 2.0 billion euros from around 3 billion euros.

The company repoted its highest North American profit margins to date and resurgent profit in Latin America. In Europe and Asia, however, results turned to a loss.

• Download full FCA third-quarter results in PDF format, above right.

In North America, the adjusted Ebit margin was 10.2 percent, exceeding the record 8.4 percent figure posted in the second quarter of 2017. The gains are an outgrowth of Fiat Chrysler’s January 2016 decision to ditch production of conventional cars in the U.S. and focus on more profitable trucks and SUVs.

Fiat Chrysler’s problems in China continued: The Jeep brand is struggling, and dealers have been forced to lower prices amid stiffer competition.

Slumping Maserati sales carried through to the third quarter.

Dividend

The automaker promised to pay 2 billion euros in extraordinary dividends using proceeds from the sale of its Magneti Marelli parts unit. FCA last week agreed a deal to sell Marelli to Japan’s Calsonic Kansei for 6.2 billion euros.

It’s the first dividend since the Italian-American company was formed in 2014, a move that fulfills a pledge made by late CEO Sergio Marchionne.

Bloomberg contributed to this report

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