FILE PHOTO: Fiat Chrysler Automobiles (FCA) headquarters are seen in Turin, Italy, July 21, 2018. REUTERS/Massimo Pinca
MILAN (Reuters) – Fiat Chrysler (FCA) on Friday confirmed its targets for this year despite reporting a 29 percent fall in first-quarter operating profit as sales and margins weakened in its North American profit center.
Chief Executive Mike Manley said in a statement the market was responding “enthusiastically” to the roll out of new models and that the Italian-American carmaker would continue efforts to strengthen the underperforming parts of its business.
“Based on these factors and our first quarter results being in line with our expectations, we are confident in our 2019 guidance,” ha said.
Adjusted earnings before interest and tax (EBIT) stood at 1.07 billion euros ($1.2 billion) in the January-March period, short of analysts’ expectations of 1.31 billion euros, according to a Reuters poll.
Sales dropped 5 percent to 24.48 billion euros, versus estimates of 26.49 billion euros.
Operating profit margins in North America fell to 6.5 percent, down 90 basis points on the same period a year ago.
Analysts and investors have been worried about FCA’s over-reliance on one region, which accounted for nearly all – 98 percent – of profits in the quarter and given its loss-making operations in both Asia and Europe.
Milan-listed shares in FCA fell 2.8 percent after the first-quarter results, before pairing losses but then rebounded and were up 1.8 percent by 1115 GMT, with traders saying the stock was reacting to the guidance confirmation.
Reporting by Giulio Piovaccari; Additional reporting by Stefano Rebaudo; Editing by Susan Fenton