As a cooling of its large Latin American market eroded earnings, Italian automaker Fiat has cut its 2014 profit guidance just after taking full control of US unit Chrysler.
Fiat reported fourth-quarter results below analyst expectations, triggering a 4 % fall in its shares. The company also said it would not pay a dividend on 2013 earnings to preserve cash after completing its acquisition of Chrysler to create the world’s seventh-largest carmaker.
Latin America and Chrysler have become increasingly important to Fiat as its business in Europe struggles with a six-year slump in auto sales. But an end to car sales incentives and currency effects has hit its operations in Brazil, which make up about one fifth of Fiat’s core earnings.
Fiat reported a fourth-quarter group trading profit of 931 million euros ($1.27 billion), compared with a restated 887 million the previous year and analysts’ consensus forecast of 1.15 billion euros.
The automaker now expects a 2014 trading profit of between 3.6-4.0 billion euros, down from a range of 4.7-5.2 billion euros given in October 2012 and below an analyst forecast of 4.15 billion euros.