BackFiat quarterly profit misses estimates as Latin America sales drop 21%
Second quarter net income totalled 175 million compared with 142 million a year ago
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Milan: Fiat SpA, whose shareholders vote in two days on merging the Italian car maker with US unit Chrysler Group Llc, reported profit that missed estimates as sales fell in Brazil, the company’s second-biggest market.
Second quarter net income totalled €175 million ($235 million) compared with €142 million a year earlier, Turin-based Fiat said on Wednesday in a statement. Earnings were less than the €313 million average of six analyst estimates compiled by Bloomberg.
The planned combination with Auburn Hills, Michigan-based Chrysler is part of Fiat chief executive officer (CEO) Sergio Marchionne’s strategy to create a global manufacturer on a scale to compete with industry leaders such as General Motors Co. The project focuses on rolling out higher-priced Alfa Romeo sedans, Maserati sports cars and Jeep sport-utility vehicles. Growth has been hampered by an economic slowdown in Brazil.
Fiat fell as much as 2.6% and was trading down 2.3% at €7.44 at 11.23am in Milan. That pared the stock’s gain this year to 26%, valuing the car maker at €9.36 billion.
Latin American vehicle sales fell 21% in the period, while revenue declined 23%. Brazil’s car and light-truck market contracted 12%, Fiat said.
The company stuck to a goal of increasing earnings before interest, taxes and one-time items to a range of €3.6-4 billion in 2014 from €3.39 billion last year. Bloomberg
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