Fiat Chrysler Automobiles NV posted third-quarter profit that trounced estimates and said full-year earnings will hold up much better than expected, strengthening the prospects for the carmaker’s planned merger with PSA Group.
Adjusted earnings before interest and taxes rose to 2.28 billion euros ($2.67 billion), topping projections for a decline. The results are in keeping with upbeat reports by the likes of Daimler AG, Renault SA and BMW AG that underscored how resilient auto demand has been in the midst of the pandemic.
- Fiat Chrysler forecast adjusted Ebit will be as much as 3.5 billion euros, more than double consensus. The carmaker is giving investors guidance again after withdrawing forecasts in March due to the then-uncertain impact of the coronavirus.
(Also read | Peugeot maker PSA's car revenue returns to growth after lockdowns)
- Net revenue for the third quarter fell to 25.8 billion euros, beating estimates. While that’s down about 6%, it’s a significant improvement from the 56% plunge seen in the second quarter. The Ram truck brand is helping buoy sales in North America, while government subsidies in countries including Italy and Germany are giving the industry a boost in Europe.
- Fiat Chrysler reported industrial free cash flow of 6.7 billion euros in the third quarter, a major turnabout from burning through 4.9 billion euros in the prior three months.
- In September, the company agreed to shrink a dividend tied to its merger with PSA by 2.6 billion euros to shore up the combined company’s finances. The amended terms will give Carlos Tavares, PSA’s chief executive officer, more cash to work with when he takes the helm of an empire making Peugeots in France, Alfa Romeos in Italy and Jeeps in the U.S.
Fiat Chrysler shares pared declines Wednesday in Milan trading amid a broader sell-off in European equities. The stock has slumped about 19% this year.
This story has been published from a wire agency feed without modifications to the text.