Italian carmaker Fiat Group (FIATY.PK) on Tuesday reported a 92 percent decline in profit for the second quarter from last year, when results were boosted by a one-time gain on the company's acquisition of a controlling stake in U.S. automaker Chrysler Group LLC.
Looking ahead, the company reiterated its financial outlook for fiscal 2012 despite the continued deterioration in the European economy.
Fiat Group took control of Chrysler under a 2009 bailout deal and recently upped its stake in the U.S. car maker to 61.8 percent. Chrysler's results were consolidated by Fiat Group from June 2011.
The company noted that all regions contributed positively in the second quarter, with the exception of Europe, where losses narrowed from the preceding first quarter.
In the NAFTA region, comprising the U.S., Canada, and Mexico, revenue for the quarter grew more than three-fold from last year to 10.98 billion euros. Vehicle shipments more than tripled to 549,000 units.
In LATAM, consisting of South and Central America but excluding Mexico, revenue declined 2.3 percent to 2.62 billion euros. Shipments declined 4.2 percent to 226,000 units.
Asia Pacific or APAC revenue more than tripled to 763 million euros, with shipments also rising more than three-fold to 26,000 units.
In Europe and Middle East, and Africa, or EMEA, revenue declined 6 percent to 4.92 billion euros. Shipments were down 10.9 percent to 301,000 units.
Fiat's luxury and performance brands increased revenues by 8.7 percent to 0.8 billion euros, driven by growth in Asia and North America. Components segment revenues were down 4.9 percent to 2.02 billion euros, mainly due to the weakness of the European car industry.
Fiat Group's second-quarter net income declined to 103 million euros from 1.31 billion euros in the year-ago period. The prior-year quarter's results include a one-off capital gain of 1.06 billion euros related to the acquisition of a controlling stake in Chrysler.
Trading profit for the quarter rose to 1.01 billion euros from 525 million euros in the year-ago period, reflecting continued strong performance for Chrysler brands in NAFTA and APAC.
Net revenues grew 64 percent to 21.52 billion euros from 13.15 billion euros in the prior-year quarter.
Revenues reflect strong growth in NAFTA and APAC, partially offset by a softening in LATAM and a decline in EMEA due to the continued deterioration in the European economy. However, the Brazilian market rebounded strongly in June.
Excluding Chrysler, revenues declined 7.5 percent to 9.2 billion euros, mainly reflecting volume declines in Europe due to difficult trading conditions for both passenger cars and light commercial vehicles, particularly in Italy, as a result of the economic climate.
Looking ahead to fiscal 2012, Fiat confirmed its financial guidance. The company still anticipates net profit for the year between 1.2 billion euros to 1.5 billion euros, and revenues in excess of 77 billion euros.
In Milan, shares of the company were trading at 3.96 euros, down 0.22 or 5.40 percent, on a volume of 26.39 million shares.
FIATY.PK is currently trading at $4.88, down $0.25 or 4.87 percent on a volume of 21,476 shares.
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by RTT Staff Writer
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