FCA US sees modest quarterly profit surge of 1.5% image

Fiat Chrysler Automobiles NV’s local US division – the former Chrysler Group LLC – announced a 1.5 percent growth in the fourth-quarter profit, buoyed by cheap gasoline and demand for the company’s Jeep and Ram brands.

FCA US announced in a statement that its adjusted earnings were up to $669 million from $659 million a year earlier, and due to costs related to warranties and recalls the modified operating profit margin was down one percentage point to 4.2%. “We did see some profitability erosion during the fourth quarter, but that’s expected from the recalls that the company has had,” commented Richard Hilgert, a Morningstar Inc. analyst. Last year was a very sensitive one for US auto safety regulators, in light of the massive GM ignition switch scandal and Takata Corp. airbag inflator debacle.

Fiat Chrysler, up until now entirely dependant on the North American earnings to compensate losses in Europe and elsewhere also turned a profit in the other core continental market during the fourth quarter for the first time since 2007. Chief Executive Officer Sergio Marchionne added last week that although pressures are expected to build, all regions are forecasted to be profitable in 2015 – a news that buoys his five-year business strategy for an investment plan worth 48 billion-euro ($55 billion) striving to lift sales 52 percent to 7 million vehicles in 2018. FCA NV also reported last week its earnings before interest and taxes (without one-time items) jumped 14 percent to 1.08 billion euros, while FCA US’s revenue rose 8.3 percent to $23 billion, with modified earnings before interest, taxes, depreciation and amortization for the quarter down 3 percent to $1.76 billion.

Via Bloomberg