Fiat Chrysler will talk about more than earnings this week – USA TODAY
Fiat Chrysler Automobiles will talk about a lot more than just earnings when it reports its first quarter financial results on Wednesday.
The automaker said Monday it also plans to update investors on “operational initiatives” in North America as well as “it’s view on industry capital optimization” — but declined to elaborate on what either phrase means.
However, it is widely known that the automaker has been under pressure recently to increase its profit margins in North America and is in the middle of considering several plant investments — making it likely that CEO Sergio Marchionne will talk about how the company plans to make progress on Wednesday.
Marchionne also has talked frequently in recent months about the need for consolidation among the world’s largest automakers because of the increasing cost of capital investment.
John Elkann, chairman of Fiat Chrysler Automobiles, told shareholders earlier this month that said he is convinced that the automotive industry needs to go through additional consolidation because of the rising cost of developing new cars for global markets.
Marchionne said last month a combination with General Motors or Ford would be “technically feasible.”
Top executives from automakers including GM, Ford and Peugeot have forcefully denied any interest in a possible merger, acquisition or deal with Fiat Chrysler in recent weeks, but that has not quelled speculation that Marchionne will continue to look for another partner before he retires a few years from now.
While Marchionne has earned high marks for successfully merging Fiat and Chrysler into a single, global automaker the company has struggled to earn as much money as its competitors on the cars and trucks it sells.
Automotive News reported last week that the company is has raised the price of vehicle invoice — but not the corresponding sticker prices — of its cars and trucks, which boosts the company’s profits but squeezes dealer profits.
Last year, the automaker earned a profit of just $717 million on revenue of $108.9 billion.
“While revenue growth has been spectacular, profitability has simply not kept pace,” Bernstein Research analyst Max Warburton said in a report issued April 14.
In 2014, the operating profit for Chrysler, which is now a subsidiary of FCA, earned an operating margin of 4.2% while Ford’s profit margin in North America is about 12% and GM’s profit margin in 8%.