Fiat Chrysler returns to $101.1M profit in Q1 – USA TODAY
Fiat Chrysler Automobiles said Wednesday it earned a profit of $101.2 million (92 million euro) during the first quarter as margins improved in North America and the automaker continued to show improvement in Europe.
FCA earned a profit for the second straight quarter in Europe where it has struggled for several years and made more money in North America but said its losses in South America deepened.
FCA’s profit for the first quarter of this year was an improvement over the $190 million loss (173 million euro) that the automaker reported last year after it recorded a $672-million charge to cover the cost of purchasing shares of Chrysler previously held by the UAW Retiree Medical Benefits Trust.
The automaker reported earnings per share of 52 cents compared with a loss of $1.55 per share for the same period a year ago.
Those results easily beat analysts expectations who predicted the automaker would earn 7 cents per share.
The company’s operating profits increased 22% to $880 million (800 million euro) during the first quarter compared with $720 million (655 million euro) for the same period a year ago.
FCA also said it sold 1.09 million cars and trucks globally during the first quarter and said it is on track to meet its goals for the year.
The automaker confirmed that it expects to sell a total of 4.8 million to 5 million cars and trucks this year and earn a total profit in a range of $1.1 billion to $1.2 billion.
In North America, FCA earned $663 million (603 million euro) before taxes compared with a loss of $128.7 million (117 million euro) last year.
The automaker said its profits increased in North America because it sold more vehicles and its profit per vehicle increased. The company’s profit margin increased to 3.7% in the region during the first quarter, up from 3.8% a year ago.
FCA US, the company previously known as Chrysler, is now 100% owned by FCA and will report earnings separately sometime early next month.
In Europe, the automaker reported its second straight quarter of profits after several years of losses that occurred during the continent’s deep recession. FCA reported an operating profit of $27 million (25 million euro) compared with a loss of $79 million (72 million euro) for the same period a year ago.
The automaker’s profits there stand in contrast to Ford and General Motors, which both reported losses in the region during the first quarter.
However, the automaker’s operating losses in South America fell to $78 million (71 million euro), which is 45% more than the $53.9 million (49 million euro) the automaker lost in the region for the same period a year ago.
A faltering economy in Brazil could pose big problems for FCA this year because Fiat has the largest market share of any automaker there. Also, the automaker celebrated the grand opening of a new Jeep plant in Pernambuco, Brazil on Tuesday.
That plant is producing Jeep Renegade subcompact cars for the Brazilian and South American market and is capable of producing up to 250,000 vehicles per year. The automaker spent $1.3 billion on the plant and is hoping to rapidly increase Jeep’s market share in South America.
Contact Brent Snavely: 313-222-6512 or email@example.com. Follow him on Twitter @BrentSnavely.