Fiat reported first quarter profit down 23% as auto market continued to drop in Europe and earnings were pulled down by new models in the US.
Fiat’s EBIT fell to 618 million euro from 806 million euro during the same period last year, missing the analysts’ estimates of 691 million euro. Revenue also fell 2.3% to 19.8 billion euro. Fiat said it keeps its target to reach a 2013 profit between 4 billion euro and 4.5 billion euro, from 3.81 euro last year, even if auto market in Europe fell 9.7% during the first quarter and it heads towards its sixth consecutive year of decline.
After a loss in Europe of more than 700 million euro in 2012, Fiat still plans to buy the rest of 41.5% stake in Chrysler and end losses in the region. Chrysler’s profit during the first quarter fell 65% on new vehicle launches and net income fell to $166 million, compared with $473 million during the same period last year.
“We see no recovery ahead for Fiat as the group will suffer from the worse-than-expected trend in Europe in 2013,” Andrea Balloni, an analyst at Fidentiis Equities SA in Milan, said ahead of the results. “From a speculative point of view, the buyout of Chrysler is the main short-term catalyst.”